SunWorks Inc (SUNWQ)

[CashMoneyCarl]

Analyst Actions: Sunworks Initiated at Buy by Chardan With $5/Share Price Target

07:43 AM EDT, 08/04/2016 (MT Newswires) -- Sunworks (SUNW) received a buy investment rating Thursday from Chardan Capital Markets, which initiated coverage of the provider of photo-voltaic-based power systems with a price target of $5 per share.

The price target compares with a Wednesday closing price of $3.24 per share, and is above the stock's 52-week high of $4.27.

In setting the buy rating, Chardan noted Sunworks "serves the fast-growing solar installation market and is benefitting from a favorable regulatory environment, weakened competitors, a robust [merger-and-acquisition] pipeline and dealing costs of solar modules."

The firm noted Sunworks expects revenue this year to reach $100 million, nearly double the $54 million it posted last year. "Part of the increase due to the acquisition of Elite Solar, but pro forma for that purchase, sales last year were $66 million," the firm said. "This results in a 50% increase in sales this year off the pro forma revenue. The company's backlog at the end of May exceeded $50 million and it has substantial visibility into its $100+ million revenue guidance."

Chardan highlighted what it described as two key differentiators of Sunworks: "its focus on the commercial market and selling direct ownership of it systems, instead of leasing or entering into a [power-purchase agreement] with its customers." It noted commercial customers typically install larger systems, have larger returns on investment than residential users and are less impacted by regulatory changes.