Why SunPower Shares Are Trading Lower Today

Wells Fargo analyst Michael Blum initiated coverage of SunPower Corp SPWR with an Underweight rating and a price target of $17.
SPWR is a pure-play residential solar provider with over 444K customers.
The analyst mentions that SPWR's largely new management team has pivoted its focus to customer service, with plans to increase offerings and revenues per customer. SPWR employs primarily a direct sales model, which generates strong revenues and FCF, he added.
Blum forecasts SPWR to grow revenue at a 10-year CAGR of 14%, driven by an acceleration of solar deployments.
The analyst is optimistic about residential solar's long-term prospects, citing an enormous growth runway (only 4% penetration) and enhanced pricing power as electricity rates rise at an accelerated rate.
Blum believes SPWR's predominantly direct sales business strategy is more vulnerable to a potential economic slowdown than residential solar provider peers with a higher mix of recurring revenue.
Price Action: SPWR shares are trading lower by 10.52% at $15.18 on the last check Wednesday.
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