Although its business is energy, it seems that is precisely what Solaria has been missing this year in the stock market. But the renewable business begins the month of October with the charged batteries And increases of almost 5% this Tuesday, which is its best day since June and it is, for the moment, the most bullish firm on the Ibex 35 of the day. The reason? Half-year results presented this Monday.
The renewable energy company presented figures that were slightly above analyst estimates in terms of sales and Ebitdaalthough the data still represents a contraction in its activity on an annual basis. Concretely, revenues reached 83 million euros, against the 77 million expected by the consensus of analysts included. Bloomberg and the gross profit amounted to 84 million (5% more than what was projected by the experts).
Although it exceeded expectations, Solaria reduced its Ebitda forecast for this year and next yearnow set at 205-215 million euros for 2024 (compared to 232-251 million previously estimated) and 245-255 million euros for 2025 (297-325 million previously estimated). This drop, however, remains higher than the projections made by experts who estimate the gross profit for the current year at 197 million and the following year at 224 million.
Investor euphoria comes not so much from the income statement as from some of the company’s new goals. The solar company announced that it plans to “obtain more extraordinary revenues through business diversification” in 2025, reaching a total of 250 million in cash and generate a total of 1,000 million in the next four years. Solaria plans to achieve this goal with the rotation of assets in Spain, new agreements with data centers and the capital increase of Iandco Generia (its land development subsidiary for renewable energies). Indeed, as we recently learned, the company is seeking to obtain the entry of a partner into the subsidiary through a capital increase.
Regarding data centers, Banco Sabadell explains that “they want to focus on this activity and become a global provider of these centers (renewable energies, infrastructure, etc.). They hope that in the years to come, this will be a relevant activity for the group (670 million euros of cash generation over the period 2024/28). Currently it has the capacity to connect up to 270 MW and the aim is to obtain 1,000 MW of connection permits by 2025.
In addition, thanks to the income that can be derived from these operations, Solaria plans to launch a share buyback programwhich also supports the action this Monday. “Although the company has not yet defined the precise conditions that would trigger the buyback, the CEO himself mentioned that he himself could start buying shares “aggressively”, because he considers that the Solaria shares are undervalued,” Barclays reported.
Despite the optimism that is spreading among investors this Monday, the drop suffered by the company on the stock market continues to be the worst of the entire Ibex 35. And, after Monday’s increases, It continues to lose more than 35% of its market value each year.
The expert consensus that collects Bloomberg he also does not expect that the company will be able to return to positive territory during the financial year in the coming months, asThey only attribute an upside potential of 16%, seeing on average the value of its title at 13.83 euros.. Indeed, since the start of the year, its average valuation has fallen by up to 28% compared to the 19.30 euros that analysts set as the price target for the end of 2024. Its price is currently around 12 euros.
In fact, late last week, Solaria’s recommendation became a sell for the first time since the end of 2022, even if the experts’ poster for their titles must now be maintained again. However, some analysts remain optimistic about the behavior of renewable energies on the stock market. The Banco Sabadell analysis team reiterates this Tuesday its recommendation to buy the company’s shares. They have also been doing this since Renta 4. In fact, since the latter, they have set Solaria’s price target at 18.30 euros, which gives it a revaluation potential of 53%. Only three analysis banks offer more attractive valuations than Renta 4: GVC Gaesco (19 euros), Oddo (20.50 euros) and Berenbeng (21 euros).
