Shares of residential and commercial solar company SunPower (SPWR 1.15%) dropped Thursday after the company reported its fourth-quarter and full-year 2020 earnings last night. As of 2:45 p.m. EST, shares were 15% below Wednesday's closing price.
Though SunPower beat the expected $0.11 per-share income by $0.03, according to FactSet, revenue of $342 million for Q4r ended Jan. 3, 2021 missed estimates. Investors today appear to be unhappy with the first-quarter and full-year 2021 guidance the company provided.
Though SunPower said it expects to lose between $10 million and $20 million in the 2021 first quarter, the company expressed confidence that its full-year 2021 results will meet or exceed previous guidance, which predicted revenue growth of about 35% in 2021.
But investor expectations have also been raised recently. An acceleration of solar-power adoption in the U.S. has been predicted with the new Democratic administration. This includes growth in solar-storage solutions in which SunPower also participates. In the company's own words as stated in the earnings release: "Given strong industry tailwinds, continued federal policy support as well [as] increased demand for its residential and commercial storage solutions," it expects strong future growth to continue.
But shares of SunPower have risen almost 600% in the past year, which raises growth expectations to justify its valuation. Investors today appear to be adjusting to the reality of a time frame for that growth. For long-term investors, the dip may be a buying opportunity -- if one is comfortable with the volatility of the sector.