Equity valuation of SolarCity
Autor(a) principal: | |
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Data de Publicação: | 2016 |
Tipo de documento: | Dissertação |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10400.14/20561 |
Resumo: | In this research note, a valuation exercise of SolarCity – a solar panel manufacturer and supplier – is presented. SolarCity is a recently created company (2006), whose aim is to lower the cost of solar panels in order to allow people to follow a “greener” source of energy. This company was founded by Peter and Lyndon River, with the financial and marketing push given by their cousin, Elon Musk, when he participated in the first round of financing. SolarCity only operates in some states of the USA, being fully vertically integrated it is present from the manufacture until the maintenance of the already installed solar systems, which renders a huge advantage in relation to its competitors. In the valuation exercise the DCF model was applied along with the WACC discount rate, which seemed the most appropriate model to value the company given the available information and its capital structure. A relative valuation was then constructed, along with an EVA model in order to compare and validate the results obtained in the DCF. A target price of $36.50 per share was thus reached for SolarCity. Subsequently, a comparison with a major investment bank research note was performed in order to compare the methodology used and the final target price - JP Morgan Research note, performed on the 23rd February 2016. In the end, a Hold recommendation criterion for the stock was reached. This does not consider the stock to be undervalued, because of the industry where it operates and the good growth perspectives. |
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Equity valuation of SolarCityDomínio/Área Científica::Ciências Sociais::Economia e GestãoIn this research note, a valuation exercise of SolarCity – a solar panel manufacturer and supplier – is presented. SolarCity is a recently created company (2006), whose aim is to lower the cost of solar panels in order to allow people to follow a “greener” source of energy. This company was founded by Peter and Lyndon River, with the financial and marketing push given by their cousin, Elon Musk, when he participated in the first round of financing. SolarCity only operates in some states of the USA, being fully vertically integrated it is present from the manufacture until the maintenance of the already installed solar systems, which renders a huge advantage in relation to its competitors. In the valuation exercise the DCF model was applied along with the WACC discount rate, which seemed the most appropriate model to value the company given the available information and its capital structure. A relative valuation was then constructed, along with an EVA model in order to compare and validate the results obtained in the DCF. A target price of $36.50 per share was thus reached for SolarCity. Subsequently, a comparison with a major investment bank research note was performed in order to compare the methodology used and the final target price - JP Morgan Research note, performed on the 23rd February 2016. In the end, a Hold recommendation criterion for the stock was reached. This does not consider the stock to be undervalued, because of the industry where it operates and the good growth perspectives.Neste Equity Research é feita uma avaliação da empresa SolarCity, um construtor e fornecedor de painéis solares. A empresa tem como principal objetivo produzir e vender painéis solares a baixo preço para que as pessoas tenham um maior incentivo e possam mudar para uma fonte de energia mais “verde”. A área de atividade da empresa cinge-se a 16 estados dos Estados Unidos da América, operando em todos os sectores da cadeia de valor, sendo esta integração uma grande vantagem da empresa em comparação com a sua competição. Nesta avaliação, foi escolhido o DCF com WACC como taxa de desconto para a avaliação, sendo o mais apropriado para avaliar esta empresa, tendo em conta a informação disponível e a estrutura de capital. Foi também construído uma relative valuation e um modelo EVA de forma a poder ser feita a comparação e validação dos resultados obtidos com o DCF. Feito tudo isto, o target price obtido para a SolarCity foi de $36.50 por ação. Foi também realizada uma comparação com um relatório de um banco de investimento – JP Morgan (JP Morgan Research note realizado a 23 de Fevereiro de 2016) – de forma a se perceber se existe alguma semelhança nos resultados obtidos e quais as diferenças obtidas e uma justificação para as mesmas. No final, a recomendação a que se chegou foi de Hold, não considerando no entanto que as ações da empresa estejam subvalorizadas, tendo em conta a indústria em que opera e as perspetivas de crescimento.Martins, José Carlos TudelaVeritati - Repositório Institucional da Universidade Católica PortuguesaPedro, André Pereira2016-09-08T10:25:26Z2016-07-2120162016-07-21T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/masterThesisapplication/pdfhttp://hdl.handle.net/10400.14/20561TID:201242699enginfo:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-12T17:26:26ZPortal AgregadorONG |
dc.title.none.fl_str_mv |
Equity valuation of SolarCity |
title |
Equity valuation of SolarCity |
spellingShingle |
Equity valuation of SolarCity Pedro, André Pereira Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
title_short |
Equity valuation of SolarCity |
title_full |
Equity valuation of SolarCity |
title_fullStr |
Equity valuation of SolarCity |
title_full_unstemmed |
Equity valuation of SolarCity |
title_sort |
Equity valuation of SolarCity |
author |
Pedro, André Pereira |
author_facet |
Pedro, André Pereira |
author_role |
author |
dc.contributor.none.fl_str_mv |
Martins, José Carlos Tudela Veritati - Repositório Institucional da Universidade Católica Portuguesa |
dc.contributor.author.fl_str_mv |
Pedro, André Pereira |
dc.subject.por.fl_str_mv |
Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
topic |
Domínio/Área Científica::Ciências Sociais::Economia e Gestão |
description |
In this research note, a valuation exercise of SolarCity – a solar panel manufacturer and supplier – is presented. SolarCity is a recently created company (2006), whose aim is to lower the cost of solar panels in order to allow people to follow a “greener” source of energy. This company was founded by Peter and Lyndon River, with the financial and marketing push given by their cousin, Elon Musk, when he participated in the first round of financing. SolarCity only operates in some states of the USA, being fully vertically integrated it is present from the manufacture until the maintenance of the already installed solar systems, which renders a huge advantage in relation to its competitors. In the valuation exercise the DCF model was applied along with the WACC discount rate, which seemed the most appropriate model to value the company given the available information and its capital structure. A relative valuation was then constructed, along with an EVA model in order to compare and validate the results obtained in the DCF. A target price of $36.50 per share was thus reached for SolarCity. Subsequently, a comparison with a major investment bank research note was performed in order to compare the methodology used and the final target price - JP Morgan Research note, performed on the 23rd February 2016. In the end, a Hold recommendation criterion for the stock was reached. This does not consider the stock to be undervalued, because of the industry where it operates and the good growth perspectives. |
publishDate |
2016 |
dc.date.none.fl_str_mv |
2016-09-08T10:25:26Z 2016-07-21 2016 2016-07-21T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
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info:eu-repo/semantics/masterThesis |
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masterThesis |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10400.14/20561 TID:201242699 |
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http://hdl.handle.net/10400.14/20561 |
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TID:201242699 |
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eng |
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eng |
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openAccess |
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application/pdf |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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