Sunworks Inc is an American solar panel company. The company loses money but has a large cash pile available. Initial targets are $17 with support below at $7.11.
Sunworks Inc (NASDAQ: SUNW) is a solar panel integration company based in California. The company has been around for about 33 years and can install solar panels for commercial, residential and agricultural units along with more specialist items/machines such as motorhomes, yachts and more. Sunworks is a loss-making company, however, given this industry is growing and the experience this company holds investor backing seems to be strong. At the start of the year, Sunworks stock was $5 and it peaked at $29 by mid-February representing a 500%+ increase in just 8 weeks. The stock has since then fallen to its current price of $9.66, but technicals suggest that this downtrend could be over.
From a financial aspect, the company is mixed. Total Market capitalisation is $280m with 2020 revenue at $37.9m. COVID has affected revenue immensely for Sunworks as in 2019 revenue was $59m and in 2018, $70m. As a result of the decline in revenue, Sunworks took a loss after tax of $15.9m with an EPS of -$1.03. Looking at the balance sheet though, cash on hand rose to $39.3m end of 2020, but even better in Q1 of 2021, this rose further to a huge cash pile of $82.7m. With total assets at $98m in Q1 2020 and liabilities at $19.7m, this leaves Sunworks net positive $78.3m. This gives the company liabilities to asset ratio of 21.1% which is way below average.
From a technical aspect, the stock looks positive. MACD trends up with RSI reading 53.4 on the daily timeframe. Support sits below at $9.43 followed by $8.31 and then yearly lows of $7.11. Unless $7.11 breaks, the upside seems more favourable. Looking to the upside, as the chart suggests the initial target is 'A' at $12.93 followed by $17.34. A break above here could take Sunworks towards $25.
Overall this company has positive and negatives. The upside seems possible from a technical aspect as there is support below for this stock with a good upside potential that outweighs the risks here. The financials give mixed outlooks, even though revenue has fallen and it has been unprofitable for around 4 years, cash on hand has increased 1,313% in 12 months, while keeping liabilities practically the same. This says indicates investors are confident in this company or they have access to some serious capital, which again, leads to investor confidence. Sunworks is also in a developing industry that will expand massively in the next 10-15 years.
