Sunnova Energy International (ticker: NOVA) announced on Thursday that it no longer expects to raise $500 million in corporate capital for fiscal 2024. The solar-panel company's Chief Financial Officer, Robert Lane, shared this news during a conference call with investors. He attributed the improved outlook to several strategic initiatives, including cost reductions, price adjustments, and a decrease in investments for new systems. This positive development has contributed to an increase in liquidity, with Sunnova currently holding $725.1 million in cash as of September 30.
Impressive Market Response
Following the announcement, Sunnova's stock experienced a significant surge of 15%, reaching $9.22 per share. This jump marks the company's highest percentage increase since November 2022, according to Dow Jones Market Data. Furthermore, it is the largest post-earnings gain for Sunnova stock since the release of its second-quarter results in July 2022.
Third-Quarter Performance and Outlook
Sunnova reported a loss of 53 cents per share in the third quarter, with revenue amounting to $198.4 million. Analysts surveyed by FactSet had anticipated a loss of 33 cents per share from revenue of $205 million. Looking ahead, the company projects its earnings before interest, taxes, depreciation, and amortization (EBITDA) for fiscal 2024 to be within the range of $350 million to $450 million, surpassing the FactSet consensus estimate of $333.2 million.
Resilience in a Challenging Market
Despite facing obstacles such as higher interest rates and concerns surrounding the growth of residential solar, Sunnova demonstrates resilience in the face of market dynamics. CEO John Berger emphasized this during the conference call, stating, "Sunnova remains resilient despite the challenging market dynamics marked by higher interest rates and concerns about overall residential solar growth."
The rise in interest rates has made financing home-improvement projects, including solar panel installations, more costly. Adding to the challenges, regulatory changes in California, the leading state for solar panels, have also dampened demand. As a result, the solar industry has encountered difficulties throughout 2023, reflected in Sunnova stock's decline of 49% thus far this year.