Critical Analysis: Vivint Solar (NYSE:VSLR) & TerraForm Global (GLBL)
Vivint Solar (NYSE: VSLR) and TerraForm Global (NASDAQ:GLBL) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitabiliy, dividends and institutional ownership.
This is a summary of current ratings for Vivint Solar and TerraForm Global, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Vivint Solar currently has a consensus price target of $5.40, suggesting a potential upside of 10.20%. TerraForm Global has a consensus price target of $7.00, suggesting a potential upside of 39.30%. Given TerraForm Global’s stronger consensus rating and higher possible upside, analysts clearly believe TerraForm Global is more favorable than Vivint Solar.
Risk & Volatility
Vivint Solar has a beta of -0.25, suggesting that its stock price is 125% less volatile than the S&P 500. Comparatively, TerraForm Global has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.
This table compares Vivint Solar and TerraForm Global’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Earnings and Valuation
This table compares Vivint Solar and TerraForm Global’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Vivint Solar||$171.05 million||3.17||-$84.91 million||$0.55||8.91|
|TerraForm Global||$223.12 million||2.54||$95.23 million||($0.45)||-11.17|
TerraForm Global has higher revenue and earnings than Vivint Solar. TerraForm Global is trading at a lower price-to-earnings ratio than Vivint Solar, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
93.7% of Vivint Solar shares are held by institutional investors. Comparatively, 58.4% of TerraForm Global shares are held by institutional investors. 4.5% of Vivint Solar shares are held by company insiders. Comparatively, 0.5% of TerraForm Global shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
TerraForm Global beats Vivint Solar on 7 of the 12 factors compared between the two stocks.
About Vivint Solar
Vivint Solar, Inc. offers distributed solar energy, electricity generated by a solar energy system installed at or near customers’ locations, to residential customers. Through investment funds, the Company owns solar energy systems it installs and provides solar electricity pursuant to long-term contracts with its customers. The Company also sells solar energy systems outright to customers. The Company deploys its direct-to-home sales force to provide in-person professional consultations to prospective customers to evaluate the feasibility of installing a solar energy system at their residence. The Company’s systems use communication gateways and monitoring services to collect performance data. The Company operates in Arizona, California, Connecticut, Florida, Hawaii, Maryland, Massachusetts, New Jersey, New Mexico, New York, Pennsylvania, South Carolina, Texas and Utah. The Company purchases solar panels directly from multiple manufacturers.
About TerraForm Global
TerraForm Global, Inc. is a holding company. The Company is a diversified renewable energy company that owns contracted solar and wind power plants. The Company operates through two segments: Solar Energy and Wind Energy. The segments include the Company’s entire portfolio of power plants. The Company’s portfolio consisted of solar and wind power plants located in Brazil, China, India, Malaysia, South Africa, Thailand and Uruguay with an aggregate net capacity of 916.4 megawatts (MW) as of October 31, 2016. The Company’s solar and wind power plants include Salvador, Bahia, Dunhuang, Honiton, NSM 24, Focal, NSM Suryalabh, NSM Sitara, NSM L’Volta, Millenium, Brakes, Raj 5, ESP Urja, Azure, Hanumanhatti, Gadag, Bhakrani, Silverstar Pavilion, Fortune 11, Corporate Season, Boshof, Witkop, Soutpan and PP Solar.
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