Question

Stock Valuation and Analysis :

Vivint Solar, Inc. (VSLR)

NYSE - Nasdaq Real Time Price. Currency in USD

Assignment Content

Top of Form

Resource

• Stock Valuation and Analysis,Stock Valuation and Analysis Grading Guide

Purpose of Assignment

The purpose of this assignment is to allow students the opportunity to research a Fortune 500 company stock using the popular online research tool, Yahoo Finance. The tool allows the student to review analyst reports and other key financial information necessary to evaluate the stock value and make an educated decision on whether to invest.

Assignment Steps

Select a Fortune 500 company from one of the following industries:

• Pharmaceutical
• Energy
• Retail
• Automotive
• Computer Hardware
• Manufacturing
• Mining

Access Yahoo Finance and enter the company name.

Review the financial information and statistics provided for the stock you selected and answer the following:

• What is the ticker symbol of the company you chose?
• What is the Current Stock Price?
• What is the Market Cap for the stock you chose?
• What is the Price to Earnings Ratio?
• What is the Dividend and Yield?
• What is the Enterprise Value?
• What is the Beta?
• Was there a Stock Split, and if so, when?
• What was the closing stock price for the last 5 days?
• What was the 52 Week High for this stock?
• What is the Book Value per Share?
• What type of rating are analysts recommending (i.e. buy, hold, etc.)?
• What is the target price analysts are predicting for this stock?
• What is the analyst's average revenue estimate for next year?
• What are some of the significant news items and press releases made by the company over the last year?

Explain in 700 words why you would or would not recommend investing in this stock.

• Describe the relationship between the value of the stock and the price to earnings ratio.
• What information does the Market Capitalization (Market Cap) and Beta provide to the investor?

Submit your assignment.

Answer 1

Ticker symbol of the company you chose: VSLR

Current Stock Price: 6.65

Market Cap for the stock:808.766M

Price to Earnings Ratio: 0.00

Dividend and Yield: Not Applicable

Enterprise Value: 2.26Billion as of Oct 25, 2019

Beta: 0.73

Was there a Stock Split, and if so, when? Not Applicable

Closing stock price for the last 5 days? 6.64

What was the 52 Week High for this stock? 9.82

Book Value per Share: $1.90 as of Oct 25,2019

Type of rating are analysts recommending (i.e. buy, hold, etc.): Strong Buy

Target price analysts are predicting for this stock: 6.65

Analyst's average revenue estimate for next year: 415.58 Million

Some of the significant news items and press releases made by the company over the last year?

*Rosen law firm announcing the filing of a class action lawsuit on behalf of Vivint solar shareholders.

*Federman & Sherwood Announces lawsuit filing over Vivint Solar company

Relationship between the value of the stock and the price to earnings ratio.

P/E ratio considers current stock price dividing by earnings per share, value of the stock represents current value of the market share price. P/E ratio represents how much you’re getting in return of how much of an investment you’re paying for.

Information that the Market Capitalization (Market Cap) and Beta provide to the investor?

Market Cap is 808.766Million which shows larger quantity of shareholders and their trust vested upon the stock. While Beta shows the value of 0.73 which is less than 1. This gives an investor an understanding that the Beta is below the volatility risk.

Why one would or would not recommend investing in this stock can be explained as below:(711 words)

Vivinta Solar is showing a good consistence from the last year as with the beginning stock price with the 4.07 till 6.65. Although this is not issuing any dividends to get better gains. Revenue from the Income Statement shows us good increase of around 8%. Although Gross profit was in the minus figures in the years of 2016 and 2015 which is not showing a good past performance. Research and development is showing a decline, which may gives a sign that the product line may be not showing the expected result. Operating Income is running under losses since past four years and it’s showing unrecovered loss of around 112494 which is a major complication. Finally looking at the Net Income, the company has shown loss drastically by 93%. Other firms such as Enphase Energy is making 5.77% stock performance whereas Vivinta is making very slow stock movements.

Cash is being increased when observed from the past years of records in the Balance sheet. But cash in hand without using it wouldn’t be any of use. Long term investments are also decreased from 14,028 to 130. Total Liabilities are in hike whereas Total Assets are good looking and consistent.

There is no evidence of positive retained earnings for the current year and looks dull with the heavy negative balance of retained earnings like 279631. Stockholder’s equity has been drastically downgraded from 780951 to 288056 which shows that the supply and demand has been eroded for the Vivinta Share market. This also shows that the market has lost its glory and has some serious issues going on within the company.

Now let’s see the news and press release of the company. We can read and understand by the recent news that many lawsuits on behalf of the shareholders have been filed against the company. Lawsuit is seeking for damage recovery for Vivinta Investors as per the Fed Laws. Company has been accused of engaging in fraudulent practices and accounting practices have been flawed and misstated. This is not a good sign for the shareholders to purchase such a stock from all the aspects such as this company is deeply in trouble with the shareholders already. Selling the existing stake may help the shareholders rather than waiting since the collapse of the shareholder’s value can be seen from the obvious reasons. Not only one cases, but going through the news and press release, it seems many cases have been filed against the company that recovering the investors itself can erode the complete company’s value. The stock price has been also not showing any growth rate since a year, showing the same range in between 4 to 6 which is not also promising a long-term equity holding return. The company is at greater risk with its recent reputation of lawsuits and absolutely no buying for the future shareholders. The company if recovered with it’s operating, financing and investing activities and also if it starts hiring a new auditing company to eradicate misrepresentation, this may have some future growth. Covering the losses and reputation that has been hurt may cause the existing shareholder’s faith decreased. Heaping the trust over the company can take longer time unless the company doesn’t repeat its previous mistakes and show a consistent growth over years.

The firm is performing very low in its profitability, and efficiency and also running in losses from past 5 years and showing very low range of volatility and beta of the market. The company has to go through such reforms which may benefit from following ethical norms of auditing and operating the company’s management. The company may have chances to run out by insolvency as it’s having higher claims over its lawsuits. Seeing Vivinta Share market decline because of misrepresentation in it’s financial statements and loss making throws us some insight on management’s efficiency and culture they maintain in the working environment. Ethical management with higher transparency could become their reform if at all they’d plan to adopt for a change management. For this new line of directors and board should be appointed. Denying to buy would be the best possible solution than buying and suffering such loss making company therefore it’s better not to buy Vivinta until it starts to recover from the reputation losses.