Tomahawk, WI 08/08/2014 (Basicsmedia) – U.S. solar giant, SolarCity Corp (NASDAQ:SCTY), was up in Thursday trading session by 3.80% after reporting a smaller than expected quarterly loss that was attributed to ‘unprecedented’ demand. Megawatts booked in the quarter was one of the strongest in the quarter according to Senior Research analyst, Ben Kallo, compared to other past quarters, as it was up by 216%.
SolarCity Corp (NASDAQ:SCTY) has also been engaging in cost reduction efforts as it seeks to bolster its profit margins, which according to Mr. Kallon has been driving the stock, especially on being the best in the industry, on the residential side.
“Two important points, megawatts booked the strongest in any quarter that we’ve seen so far and far surpasses anything historically, up 216% compared to last year Q2 2013. That sets up the back half of this year strongly and also into next year and then also their cost reduction roadmap and forecast we see some very good cost reductions leading the industry on the residential side, I think that is driving the stock performance as well,” Mr. Kallo.
Backed by Tesla Motors Inc. (NASDAQ:TSLA)’s CEO, Elon Musk, SolarCity added more than 30,000 customers in the quarter, more than triple 8,559 reported last year same quarter. SolarCity is in the process of finalizing the acquisition of solar panel maker Silevo, which it expects to enable it drive down production costs. The acquisition of the facility has already aroused concerns among some investors especially on the level of risks that it might bring to the company. SolarCity has also appointed a new CFO, who is expected to spearhead the company into profitability going forward.
“[…] it is a couple of years out before they bring that facility online, I do think it brings some elements of risk into the equation. The new CFO they brought online this week comes from Cyprus Semiconductor where he does have some manufacturing experience that will be helpful, and he is also in the board,” said Mr. Kallon.
SolarCity Corp (NASDAQ:SCTY) remains momentum driven in the market at the back of cost cuts that continue to give it high valuation.