Small-Cap NASDAQ Solar Company Positioned for Rapid Growth
Delivering competitive, clean energy solutions to customers for more than 15 years, SPI Energy (NASDAQ: SPI) is an established renewable energy player with global operations in key markets in Asia, Australia, North America, and Europe.
SPI has been integral in the development, financing, and operation of hundreds of megawatts (MWs) of solar assets around the world.
Despite nearly $200 million in assets, trailing 12-month revenue of more than $120 million, and a trend toward near-term profitability, SPI trades for a market cap of around $10 million, a small fraction of typical valuation metrics in the industry.
As the company continues to perform in the rapidly growing solar market, it should attract new investor interest that could quickly drive shares to a more realistic valuation reflective of its current financial condition and strong outlook.
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Global Footprint Provides Solid Foundation for Growth
SPI operates in multiple segments within the solar market. Since 2006, one of the primary business segments of the company focuses on developing solar PV projects that are either sold to third-party operators or owned and operated by the company for selling electricity to the grid across Japan, the U.S., Europe, and Australia.
One such project in northern Greece generates an estimated 2.4 million EUR ($2.6M USD) annually for the company. SPI acquired the final tranche of the 7.4-Megawatt (MW) project during the fourth quarter of 2019.
More recently the company completed the sale of projects it developed in Italy and Hawaii, generating cash for the company to invest in higher-margin domestic projects in the US.
Emerging Leader in Oregon Solar Market
SPI’s expanding operations in Oregon are part of a larger strategic investment initiative aimed at broadening the company’s solar projects in the US.
To date, the company has closed on 5 of 8 planned acquisitions within the first phase of its Oregon portfolio, which is expected to generate 18MW. Longer-term, the company anticipates growing this portfolio to 80MW-100MW.
SPI’s Oregon projects, located in the greater Portland region, are part of the state’s Community Solar Program, which allows developers like SPI to sell electricity at residential and commercial rates while building solar projects at utility prices, driving higher-margin revenue for the company.
SPI Energy: Global Solar Asset Developer with $125M Revenue
High-Profile Projects and 15-Year Track Record of Performance
Since 2006, SPI has been a leading solar project developer, delivering competitive, clean energy solutions to customers across the US and globally.
The company has completed rooftop solar installations for retail giant Costco, LA’s famed Staples Center, home of the Lakers, and Sacramento’s Golden1 Credit Union Center, home of the Kings, amongst other notable projects.
SPI’s Aerojet project in California even served as the backdrop for former California Governor Arnold Schwarzenegger’s signing of an executive order calling for 33% of the state’s energy to be derived from renewable sources.
The track record of experience garnered from these and other high-profile projects enable SPI’s solar project development team to provide its customers with a fully integrated solution that takes projects from conception to construction and ultimately operation.
A Market Leading Solar Wholesale Business in Australia
SPI is one of the largest providers of solar and clean energy products and solutions in the Pacific region thanks to its 2015 acquisition of Solar Juice, a dominant player in the Australian residential solar and energy storage distribution markets.
Launched in 2009, SolarJuice has established more than 5,000 B2B accounts and generates orders from around 700 active customer accounts monthly.
As a wholesale supplier, SolarJuice has developed key partners throughout Australia that have supported the growth of its brands, offering customers a range of technologies, price points, and services.
Early-Stage Investment in Battery Storage Technology
SPI is also pursuing opportunities in the burgeoning battery storage technology market, a high-growth arena forecasted to surpass $150 billion by 2025, according to MarketsandMarkets.
The company’s OpalStorage subsidiary is developing an all-in-one advanced battery energy storage system that is ideal for residential customers.
The unique design includes not only the battery, BMS and inverter in the cabinet, but also the solar array DC switch, battery DC circuit breakers, and all AC circuit breakers are built-in, with all DC and AC cables prewired, helping installers reduce solar system installation time.
With an R&D facility in Milwaukee and manufacturing capacity in China, OpalStorage could provide significant upside for SPI shareholders in the mid- to long-term as it moves into its commercialization phase.
Valuation Out-of-Sync with Fundamentals
SPI trades for a market cap of around $10 million, a small fraction of typical valuation metrics in the industry.
This extremely low valuation is completely out-of-sync with the company’s strong fundamentals, including its nearly $200 million in assets, trailing 12-month revenue of more than $120 million, and an established trend toward near-term profitability.
It should only be a matter of time before larger investors on Wall Street take notice and the shares begin trading more in-line with the company’s peers. Even just reaching 1x sales, investors at current prices could see 1,000% gains.
To learn more about SPI, watch our exclusive interview with Chief Operating Officer, Hoong Khoeng Cheong.
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