Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of SolarCity Corp. (SCTY +0.00%) jumped 19% today after the company reported another outstanding quarter.
So what: First-quarter installations were 82 MW, at the high end of its guidance, and revenue more than doubled to $63.5 million. SolarCity's model defers revenue for as much as 20 years so actual loss attributable to shareholders was $24.1 million, or $0.26 per share.
The biggest news was that 2013 guidance was increased 25 MW to 500-550 MW and 2015 installed guidance was set at 900 MW to 1 GW.
Now what: SolarCity continues to grow at breakneck speed in residential solar and it's impressive to book 136 MW of installations in the quarter, of 80% of which were residential systems. The one flaw I see is a 139% increase in operating expenses to $81.8 million. SolarCity needs to keep operating expenses in check and keep retained value per watt, which fell about $0.05 to $1.83, high to generate value long term. But in a high-growth mode, it's expected to see operating expenses rise.
Long term, the guidance is extremely encouraging and even though I have questions about SolarCity from a valuation perspective, I can't deny that they're knocking it out of the park operationally.
