Investment Research report

Sunnova Energy International Inc.

NYSE:
NOVA
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Research Overview

INDEX:
S&P 500
Sector:
Energy
Position:
Short
Date:
Sep 29, 2020

After conducting a forensic financial and accounting review, Spruce Point believes Sunnova Energy International Inc. (NYSE: NOVA), a residential solar financing business, masks its poor and unsustainable economics with potentially misleading and assumption-based non-GAAP metrics and aggressive accounting. Based on our investigation, we estimate an 80% downside risk, or $5 - $8 per share.

The report highlights several key concerns with the company, including:

  • We find that the CEO and CFO’s biographies omit ties to failed businesses 
  • We view Sunnova as a highly over-valued specialty finance business that lacks differentiated offerings and operates in a very competitive industry facing significant secular headwinds.
  • Financial performance shows a continued decline as growth slows and margins erode
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