Sunnova Energy International

Sunnova Energy International Inc. (NYSE: NOVA) is a company that provides residential solar and energy storage solutions to customers throughout the United States. The company operates using a residential solar dealership model, collaborating with local dealers who take care of the initial steps such as system design and installation on behalf of Sunnova's customers. Sunnova also offers a range of services, including operations and maintenance, continuous monitoring, repair and replacement services, equipment upgrades, and on-site power optimization for its customers.

Recent Financial and Business Updates:

• Second Quarter Income Statement Review:
• The revenue for the quarter amounted to USD166.4 million, marking a growth of USD19.4 million when compared to the same period in 2022. This upswing primarily stemmed from the expansion of the solar energy systems in operation and a boost in service revenue.
• The total net operating expenses rose to USD226.1 million for quarter, indicating a y-o-y increase of USD76.4 million. This escalation primarily occurred due to the greater number of solar energy systems in operation, increased general and administrative expenses, and elevated cost of revenue.
• Sunnova experienced a net loss of USD100.8 million for the three months ending June 30, 2023, in contrast to a net loss of USD13.8 million for the same period in 2022.
• Adjusted EBITDA was USD28.1 million for the three months ended June 30, 2023
• Balance Sheet Review:
  • As of June 30, 2023, Sunnova had total cash of USD405.9 million, including restricted and unrestricted cash.
  • Total liabilities, redeemable noncontrolling interests and equity amounted to USD9.6 billion as of June 30, 2023.
• Company Update:
  • Sunnova Energy International Inc. (NYSE: NOVA) disclosed its initiation of an underwritten public offering involving the sale of USD75.0 million worth of Sunnova's common stock, with a nominal value of USD0.0001 per share.
  • Sunnova plans to provide the underwriters with a 30-day opportunity to acquire an additional USD11.25 million worth of common stock.
  • The price for the public is USD14.75 per share.

Technical Observation (on the daily chart)

The Relative Strength Index (RSI) over a 14-day period stands at 36.91, recovering from the oversold zone and showing signs of bullish divergence with the expectations of an upside momentum. The stock price has shown decent consolidation in the USD 12-USD 14 support zone, after a healthy correction from levels of around USD 24. The current price is expected to hold these support levels with expectations of a break-out in the upward directions. Additionally, the stock's current positioning is below both 21-period SMA and 50-period SMA, which may serve as a dynamic short-term resistance level. Meanwhile, the stock price is currently taking resistance from the 21-day Simple Moving Average (SMA).

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘SPECULATIVE BUY’ rating has been given to Sunnova Energy International (NYSE: NOVA) at its current price of USD 12.11 as of September 18, 2023, 8:55 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is September 18, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.