This Hypergrowth Solar Stock is a Winning Ground-Floor Investment in the Clean Energy Revolution By Luke Lango and the InvestorPlace Research Staff The International Energy Agency (IEA) just released a total game-changing report. In it – which is a comprehensive and thorough outlook of the renewable energy market – the IEA basically said that thanks to falling costs, improving technology, and growing political support, clean energy is positioned to take over the world. Specifically, the IEA said that "renewables are set to account for 95% of the net increase in global power capacity through 2025." The IEA also predicted that renewables – led by solar and wind – will overtake coal as the largest source of electricity generation worldwide within five years. Talk about eye-opening. This is the world's largest, smartest, and most competent energy organization – and they are pounding on the table about the clean energy revolution taking over the world in the 2020s. You should be listening. The clean energy market is in the top of the first inning of redefining the multi-trillion-dollar global energy space, yet most clean energy companies are worth less than $10 billion. In other words, investing in clean energy stocks today is akin to getting in on the ground-floor of a 100-foot skyscraper. So… buy these stocks now… sit back… and enjoy the ride to the top. In today's edition of The Daily 10X, we will tell you about a hypergrowth solar service provider that is one the best "ground-floor" investments in the booming solar market. Pioneering a Genius Solar-as-a-Service Business Model to Organize the Messy Solar Market As longtime readers know, the solar market is broken down into two segments: upstream and downstream. The upstream segment comprises the technology companies that actually make the solar panels and energy storage systems. The downstream segment comprises the construction companies that originate, sell, and install those panels and storage systems. Getting these two segments to seamlessly work together is a tall order. There are dozens of upstream companies out there, making hundreds of different panels and storage systems, all with different specs and prices. Meanwhile, because installing solar is a non-homogenous process that is wildly different in California than in Puerto Rico, there are dozens of downstream local installers in every unique geography. It's a messy market. A small, $4.2 billion solar company by the name of Sunnova (NOVA) is trying to consolidate and organize this messy market. Sunnova is a residential solar service provider that essentially connects all the upstream panel makers in the solar market, to all the downstream panel installers, through one platform. The process is pretty simple. Sunnova buys solar equipment from upstream companies, in bulk and consequently at great prices. The company then partners with local "dealers" across various geographies, sells that equipment at discounted market prices to those dealers, and then provides them with various Sunnova-branded software and technology solutions to help optimize the design and installation of the solar equipment. The result is a quadruple-win business model. - Upstream companies win because they receive a steady flow of big orders from Sunnova.
- Downstream installers win because they receive high-quality product at discount prices.
- Households win because they get specialized local installers to install high-quality solar systems at great prices – as opposed to a big solar company trying to force a "one-size-fits-all" installation process into different, uniquely situated markets.
- Sunnova wins, because the company operates more like a "solar-as-a-service" company than a "solar installation" company – a paradigm shift which leads to steadier revenue growth and bigger profit margins.
In other words, Sunnova is pioneering a genius, winning business concept in the solar market. But… don't take my word for it. Just look at the numbers. Sunnova has grown its customer base by nearly 320% since 2015. Management expects to grow the customer base by another 100% over the next two years alone. Revenues are up more than 70% since 2017. Wall Street analysts see revenues rising another 265% into 2024. Adjusted EBITDA margins were 37% in 2020 (almost incredulously high for an early-stage, hypergrowth solar company), while adjusted EBITDA dollars have more than doubled over the past two years. Management expects adjusted EBITDA to rise another ~70% over the next two years. From top to bottom, this is a top-tier hypergrowth solar company with an exceptionally attractive financial profile. The runway for future growth is also exceptionally long. Sunnova's customer base today hovers just shy over 100,000. There are about 130 million households in the U.S. By 2024, 2.5% of them will be powered by solar – or over 3 million homes. By 2030, over 10% could be powered by solar – or nearly 15 million homes. Thus, Sunnova is tapping into less than 1% of its realistic addressable market by 2030. Needless to say, the long-term upside potential for this stock is enormous – so big that you may want to consider taking a position in Sunnova stock today. | Key Company Details | | Company Name | Sunnova Energy International Inc. | | Ticker Symbol | NOVA | | Share Price | $45.00 | | Current Market Value | $4.2 Billion | | Annual Revenue | $156 Million | | Catalyst | Clean Energy Revolution |
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