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SunPower Corporation revenue decreased on 3.8% while EBITDA Margin increased on 5.0 pp from -46.8% to -41.8%

02/13/2019 • About SunPower Corporation ($SPWR) • By InTwits

SunPower Corporation reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
  • SunPower Corporation is a company in decline: FY2018 revenue growth was -3.8%, 5 years revenue CAGR was -7.2%
  • The company operates at negative EBITDA Margin: -41.8%
  • SunPower Corporation spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 0.0%. Average EBITDA Margin for the same period was -14.6%
  • SunPower Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.4%. At the same time it's in pair with industry average of 7.6%
  • CAPEX is quite volatile: $45m in FY2018, $70m in FY2017, $187m in FY2016, $230m in FY2015, $103m in FY2014
  • The company has unprofitable business model: ROIC is -54.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


SunPower Corporation's Revenue decreased on 3.8%. Revenue decline showed acceleration in FY18Q4 - it was 30.6% YoY. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.0 pp from -46.8% to -41.8% in FY2018. EBITDA Margin declined at -15.0 pp per annum in FY2014-FY2018.

Gross Margin dropped on 16.2 pp from -1.0% to -17.2% in FY2018. Gross Margin followed a declining trend at -9.2 pp per annum in the last 5 years. SG&A as a % of Revenue showed almost no change in FY2018.

Net Income margin increased on 4.8 pp from -51.8% to -47.0% in FY2018. Net Income margin declined at -15.0 pp per annum in the last 5 years.

Investments (CAPEX, working capital and M&A)


In FY2018 SunPower Corporation had CAPEX/Revenue of 2.6%. The company's CAPEX/Revenue dropped on 12.0 pp from 14.6% in FY2015 to 2.6% in FY2018. Average CAPEX/Revenue for the last three years was 4.6%. During FY2014-FY2018 CAPEX as a % of Revenue topped in FY2015 at 14.6% and was declining since that time.

Leverage (Debt)


Debt level is -0.4x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2018. Debt dropped on 44.0% while cash dropped on 28.9%.

SunPower Corporation has no short term refinancing risk: cash is higher than short term debt (772.1%).

Management team


Thomas H Werner "Tom" is a the company's CEO. Thomas H Werner "Tom" is a founder and has spent 16 years with the company. SunPower Corporation's CFO is Manavendra S Sial. Manavendra S Sial has 1 year tenure at the company.

Financial and operational results


FY ended 12/30/2018

SunPower Corporation ($SPWR) key annual financial indicators

mln. $201420152016201720182018/2017
P&L
Revenue3,0271,5762,5601,7941,726-3.8%
Gross Profit625245190-19-297
SG&A288345329279260-6.7%
EBITDA360-68-288-840-722
Net Income246-187-471-929-811
Balance Sheet
Cash956955425435309-28.9%
Short Term Debt263217135840-88.8%
Long Term Debt9191,5901,5651,247859-31.1%
Cash flow
Capex1032301877045-35.7%
Ratios
Revenue growth20.7%-47.9%62.4%-29.9%-3.8%
EBITDA growth40.0%-119.0%322.0%191.3%-14.0%

Gross Margin20.6%15.5%7.4%-1.0%-17.2%-16.2%
EBITDA Margin11.9%-4.3%-11.3%-46.8%-41.8%5.0%
SG&A, % of revenue9.5%21.9%12.9%15.5%15.1%-0.5%
Net Income Margin8.1%-11.9%-18.4%-51.8%-47.0%4.8%
CAPEX, % of revenue3.4%14.6%7.3%3.9%2.6%-1.3%

ROIC10.3%-6.9%-15.2%-39.3%-54.2%-14.9%
ROE18.6%-12.5%-38.3%-116.4%
Net Debt/EBITDA0.6x

SunPower Corporation ($SPWR) key quoterly financial indicators

mln. $FY18Q1FY18Q2FY18Q3FY18Q4 YoY change
P&L
Revenue392449428457 19.1%36.9%-11.9%-30.6%
EBITDA-94-439-55-133
Net Income-116-447-90-158
Balance Sheet
Cash261257221309 -32.7%-21.6%-19.7%-28.9%
Short Term Debt359586640 351.5%-86.4%-81.5%-88.8%
Long Term Debt1,2491,2811,409859 -22.7%-6.2%-0.5%-31.1%
Ratios
Gross Margin2.7%-69.0%2.3%-1.7% 16.5%-73.9%-2.1%0.7%
EBITDA Margin -24.0% -97.8% -12.9% -29.1% 7.0%-87.8%-7.6%74.2%
Net Income Margin -29.6% -99.6% -21.0% -34.6% 37.2%-72.0%-11.5%51.8%

Peers in Semiconductors


Below you can find SunPower Corporation benchmarking vs. other companies in Semiconductors industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

Top 5 FY2014 FY2015 FY2016 FY2017 FY2018
NanoFlex Power Corp ($OPVS)72.5%354.8%
MoSys, Inc. ($MOSY)-18.4%37.2%46.8%87.7%
SMART Global Holdings, Inc. ($SGH)-16.9%42.5%69.3%
Micron Technology, Inc. ($MU)-1.0%-23.4%63.9%49.5%
Adesto Technologies Corporation ($IOTS)4.3%1.6%27.6%48.8%
 
Median (67 companies)54.6%9.7%4.4%11.0%5.0%
SunPower Corporation ($SPWR)-47.9%62.4%-29.9%-3.8%


Top companies by Gross margin, %

Top 5 FY2014 FY2015 FY2016 FY2017 FY2018
CEVA, Inc. ($CEVA)90.2%90.9%91.6%92.1%89.8%
NVE Corporation ($NVEC)77.9%80.3%76.1%78.5%79.0%
Rambus, Inc. ($RMBS)85.9%84.7%80.1%79.9%76.8%
Universal Display Corporation ($OLED)76.0%64.2%83.9%80.8%75.5%
Intermolecular, Inc. ($IMI)48.3%57.4%66.5%67.5%70.3%
 
Median (65 companies)46.4%47.7%48.0%49.1%51.0%
SunPower Corporation ($SPWR)20.6%15.5%7.4%-1.0%-17.2%


Top companies by EBITDA margin, %

Top 5 FY2014 FY2015 FY2016 FY2017 FY2018
NVE Corporation ($NVEC)58.8%66.0%61.8%65.6%65.1%
Micron Technology, Inc. ($MU)31.7%35.0%25.4%47.9%65.0%
NXP Semiconductors N.V. ($NXPI)25.7%41.5%21.6%46.2%49.9%
Texas Instruments Incorporated ($TXN)39.7%42.0%43.5%46.7%48.6%
Intel Corp ($INTC)42.8%41.0%35.2%41.7%45.7%
 
Median (66 companies)9.6%11.5%9.2%10.7%10.0%
SunPower Corporation ($SPWR)11.9%-4.3%-11.3%-46.8%-41.8%


Top companies by CAPEX/Revenue, %

Top 5 FY2014 FY2015 FY2016 FY2017 FY2018
Alpha and Omega Semiconductor Limited ($AOSL)3.0%6.6%6.5%12.2%42.2%
Renesola Ltd. ($SOL)3.5%0.0%0.0%78.0%41.7%
First Solar, Inc. ($FSLR)7.6%4.0%7.9%17.5%33.0%
Sigma Designs Inc ($SIGM)11.0%6.5%6.2%14.1%29.3%
Micron Technology, Inc. ($MU)19.0%24.8%46.9%23.3%29.2%
 
Median (66 companies)3.6%4.0%3.6%4.7%4.6%
SunPower Corporation ($SPWR)3.4%14.6%7.3%3.9%2.6%


Top companies by ROIC, %

Top 5 FY2014 FY2015 FY2016 FY2017 FY2018
SMART Global Holdings, Inc. ($SGH)2.5%21.5%51.7%
Texas Instruments Incorporated ($TXN)25.1%29.8%34.9%43.1%47.5%
Micron Technology, Inc. ($MU)18.8%15.8%0.8%21.5%42.9%
Applied Materials Inc ($AMAT)15.8%15.2%19.0%31.2%36.4%
NVIDIA Corporation ($NVDA)9.2%13.3%13.1%27.3%35.3%
 
Median (73 companies)5.0%3.8%1.7%3.2%5.2%
SunPower Corporation ($SPWR)10.3%-6.9%-15.2%-39.3%-54.2%


Top companies by Net Debt / EBITDA

Top 5 FY2014 FY2015 FY2016 FY2017 FY2018
MACOM Technology Solutions Holdings, Inc. ($MTSI)25.4x3.3x3.0x7.2x98.6x
Inphi Corporation ($IPHI)-6.4x4.5x33.7x32.2x
JinkoSolar Holding Company Limited ($JKS)4.2x3.3x4.1x11.0x8.2x
Lattice Semiconductor Corporation ($LSCC)-1.8x6.5x19.0x3.9x
Renesola Ltd. ($SOL)7.0x35.0x123.6x2.3x3.3x
 
Median (46 companies)-0.6x-0.2x0.2x0.4x0.3x