Is it time to invest in SPWR? SunPower to power Toll Brothers’ California homes

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Sep 16, 2021
  • SunPower shares on Thursday traded flat despite winning a significant power deal.
  • Toll Brothers selected SunPower to provide solar and storage to its California homes.
  • The deal also contains terms for solar and storage offerings to the rest of the US.

On Thursday, SunPower Corp (NASDAQ:SPWR) shares failed to post significant gains despite the company winning selection for a major solar and storage supply deal. Toll Brothers Inc. (NYSE:TOL) chose SunPower to supply solar and storage to its California homes. 

The deal also included terms for solar and storage supply to the rest of the US. 

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Seth Ring, Executive VP of Toll Brothers said:

We are excited to partner with SunPower to provide leading solar technology solutions to our home buyers in Toll Brothers communities across California. This partnership underscores Toll Brothers’ commitment to a cleaner environment while providing our homebuyers with additional options for renewable and reliable power, including backup home energy storage.

Toll shares rallied more than 3.60% on Thursday, reacting to the announcement. The exclusive multi-year agreement will provide homeowners with a reliable power supply, while also reducing peak-time electricity charges.

In echoing Ring, Matt Brost, Senior Director of New Homes Sales at SunPower said:

Together we can offer new home buyers the ability to generate electricity sustainably and peace of mind that they’ll be able to keep the lights on.

Should you buy or sell SunPower shares now?

SunPower shares are down 60% since peaking at the end of January, pushing the company’s valuation to an attractive P/E ratio of just 7.50. As a result, value investors could find the stock a compelling option for the portfolio.

Moreover, the analysts expect SunPower’s earnings per share to skyrocket by 136.70% this year before rising by 77.46% next year. Therefore, growth investors could also find the stock exciting for the foreseeable future. And with the SPWR stock currently trading just slightly above its 2021 lows, it could be time to buy the shares.

Source – TradingView

Can SPWR retest the 100-day MA?

Technically, SunPower shares seem to be trading within a descending channel formation in the intraday chart. However, the stock recently bounced back to avoid falling to oversold conditions of the 14-day RSI. 

And since then, the SPWR shares are yet to hit overbought conditions, leaving room for more upward movement. As a result, investors can target extended gains at approximately $23.43 or higher at $25.70 in the short term.

On the other hand, the $19.74 and $17.48 could provide support if the stock pulls back.

Bottom line: it may not be too late to buy SPWR

In summary, although SunPower shares continue to struggle to gain upward momentum, the stock price has recently bounced back, indicating a potential shift in the market sentiment. Moreover, the stock trades at an attractive P/E ratio, while offering exciting growth prospects. 

As a result, investors could be looking to buy the rebound before shares hit one of the crucial resistance levels.

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