Sky Solar Holdings Ltd.: Gathering momentum, can it sustain its performance?

Sky Solar Holdings Ltd. relative valuation is UNDERVALUED and it has a fundamental analysis score of 66.

Our analysis is based on comparing Sky Solar Holdings Ltd. with the following peers – Alterra Power Corp., Ormat Technologies, Inc., Pattern Energy Group, Inc. Class A and Calpine Corporation (MGMXF-US, ORA-US, PEGI-US and CPN-US).

Sky Solar Holdings Ltd. has shown underwhelming performance over the last one year while growing strongly over the last month. Sky Solar Holdings Ltd.’s price momentum over the last month, at 38.85% has been better than that over the last year, which was -35.23%. Also from a peer group perspective, Sky Solar Holdings Ltd. has performed better, since the peer group performance was 4.41% over the last month.

Company Snapshot

  • Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.
  • It trades at a lower Price/Book multiple (0.75) than its peer median (1.03).
  • SKYS-US’s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • SKYS-US has relatively high profit margins while operating with median asset turns.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • Over the last five years, SKYS-US’s return on assets has improved from below median to better than the median among its peers, suggesting that the company has improved its relative operations markedly.
  • The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • While SKYS-US’s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company’s capital investment program and to-date returns suggest that the company is likely making big bets on the future.
  • SKYS-US seems too levered to raise additional debt.
  • Our analysis rates Sky Solar Holdings Ltd. as UNDERVALUED relative to its peers.

Share Price Performance

Compared to peers, relative underperformance over the last year is in contrast with the more recent outperformance.

SKYS-US’s share price performance of -35.23% over the last 12 months is below its peer median but its 30-day trend in share price performance of 38.85% is better than the peer median. This recent rising stock price may herald a change in relative share price performance.

Share Price Performance

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Leading, Fading, Lagging, Rising

Relative Valuation

Relative Valuation
Fundamental Score

Sky Solar Holdings Ltd.’s price of USD 1.93 is lower than CapitalCube’s implied price of USD 2.60. CapitalCube believes that at these levels, Sky Solar Holdings Ltd. is undervalued and has upside potential. Over the last 52 week period, the stock has fluctuated between USD 1 and USD 3.62.

Valuation & Peer Metrics

A complete list of valuation metrics is available on the company page.

Company Profile

Sky Solar Holdings Ltd. engages in developing and owning solar parks. It operates through the following geographical segments: Bulgaria, Canada, Czech, Germany, Greece, Japan, Spain, USA, and Uruguay. The company was founded by Wei Li Su in 2009 and is headquartered in Hong Kong.

Disclaimer

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