Just when the sun comes out…

We have been getting a lot of rain here in San Francisco. This is the rainy time of year. But yesterday we had sunshine and it was great and I quickly forgot the rain — until this morning.

I have been thinking about alternative energy and specifically solar power and was curious about its revenue growth. I put together a trailing 12 month revenue chart for the following companies:

Figure 1. Selected Alternative Energy Technology Companies

altenergycos

I looked at total revenue for the firms and found a great revenue growth track record over the last 8 quarters.

the-sun-shines-somewhere

Source: Companies and Chris Montaño, CFA. Data courtesy of Gridstone Research

While this is all fine, it is a bit uncertain what the next 8 quarters are going to look like. Key questions I have include:

  • does credit constrict growth?
  • how quickly will the stimulus’ alternative energy initiatives impact the industry?
  • will homeowners postpone solar installations?
  • what about the pendulum swing of polysilicon under-supply swinging to over-supply?
  • wildcard: thin films
  • what the heck is up with Nanosolar’s $1b valuation?

In spite of an outlook that is murky, a couple things are certain. The sun will keep shining on (even when there are clouds) and we will increasingly need energy. Gotta watch these stocks.

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