Monday, August 6, 2007

Evergreen Solar Inc.

Evergreen Solar Inc. is a NASDAQ listed security that has been trading in a range between $6.97 and $13.21 over the past year. With 100,647,700 shares outstanding, a recent price of $8.25 gives a total market capitalization of $851,479,546. While there are certainly larger companies, Evergreen Solar Inc. has definitely earned its place in the pack. Last year, Evergreen Solar Inc. created $-0.37 in earnings for every share outstanding.

Evergreen Solar Inc. is currently priced by the market at 0.00 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share below $1 a share, Evergreen Solar Inc. is unlikely to be an interesting value proposition. Consistent earnings are the key to high valuations and this security is not on its way.


D Pickard said...

I was in Evergreen for quite some time around a year and a half ago. My neighbor has installed their product. I wish them luck, but I have a hard time at this point believing that they are going to compete in the long term with the Chinese companies in terms of the price of their products, and with so-so panel efficiency, I don't see them competing well against upcoming thin films.

Anyway, my two cents.