On Friday, Roth/MKM maintained a Buy rating on ReneSola Ltd. (NYSE: SOL) but reduced the price target to $3.00 for the shares from the previous $5.00.
The firm's decision follows ReneSola's first-quarter earnings miss and a weaker-than-expected guide for the second quarter. Despite these setbacks, the company has kept its 2024 revenue and margin forecasts.
The analyst from Roth/MKM pointed out that ReneSola is facing delays in several of its end markets, including Poland, Spain, Hungary, and the United States. The timing for overcoming these challenges remains uncertain.
The analyst emphasized that the expected ramp-up of revenue and project monetization in the latter half of the year is significant but not guaranteed.
In response to these market challenges and the potential for further project delays, Roth/MKM has adjusted its estimates for ReneSola. This move towards a more conservative outlook reflects the firm's consideration of the additional risks that ReneSola might face.
Currently, ReneSola's stock is trading at approximately three times the consensus EBITDA for 2025. Despite the reduced price target and the near-term hurdles, Roth/MKM continues to see value in the stock, which is why the Buy rating remains unchanged. The revised price target represents a cautious but still optimistic view of the company's financial prospects.
InvestingPro Insights
Recent data from InvestingPro highlights several key metrics for ReneSola Ltd. (NYSE: SOL) that may interest investors. The company holds a market capitalization of $110.13M and is trading at a low Price / Book multiple of 0.34 as of the last twelve months ending Q4 2023. This could signify a potentially undervalued stock, especially considering the substantial revenue growth of 70.78% during the same period. Additionally, the company's revenue growth for Q4 2023 was an impressive 112.76%, showcasing a strong upward trajectory in sales.
Despite not paying dividends, ReneSola has shown a strong return over the last month with a 14.13% price total return, which aligns with the optimism from Roth/MKM's continued Buy rating. Investors should note, as per InvestingPro Tips, that analysts predict ReneSola will be profitable this year and that net income is expected to grow. Furthermore, the company's liquid assets exceed its short-term obligations, indicating a solid liquidity position.
For those considering an investment in ReneSola, there are additional InvestingPro Tips available that can provide deeper insights. Currently, there are 12 more tips listed on InvestingPro, which can be accessed at https://www.investing.com/pro/SOL. To gain an even more comprehensive understanding and to take advantage of these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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