Should you buy this solar company backed by Chamath Palihapitiya?


Sunlight Financial set to go public through merger with blank check company Spartan Acquisition Corp II (NYSE: SPRQ), and the notable investor of the SPAC, Chamath Palihapitiya, provides part of the private investments in public equity financing (PIPE). But is this solar finance company’s growth opportunity compelling enough that it deserves to be sought out by investors? In this fool live Video clip, recorded on March 15, contributors Matt Frankel, CFP, Brian Withers and Dan Caplinger discuss Sunlight Financial’s business and whether it’s worth taking a closer look.

Brian Withers: Sunlight Financial. So similar case. It is still under the SPRQ ticker. But I’m going to talk about the Sunlight Financial company. They are partnering with solar panel installation and home improvement contractors nationwide to provide innovative and affordable loans. They therefore do not have a proprietary software platform – software – and partnerships with 800 installers. It’s light capital and acts like a market that matches consumer loan partners, much like a mortgage broker. It facilitated about $ 1.5 billion in loans in 2020, thanks to 1,000 solar installers and home improvement contractors. So some of the positive winds I’m seeing are falling solar energy costs, 20-year loan home inventories, and demand for larger contracts or managed home improvement projects, including the solar energy, increase. Thus, the benefits for entrepreneurs are guaranteed prompt payment. The homeowner benefits are obviously a kind of one stop shop for working with your contractor and getting a loan. You can make an easy purchase now, pay later to get your home upgrades. 2020 revenue is estimated at $ 69 million with a net profit of $ 12 million. They are therefore very profitable. They are forecast to increase by 80% year-on-year next year. He competes, there is a fairly healthy competition, Sunrun, SunPower, You’re here, and banks, don’t know that these asset-like tech platforms are a good investment here, but it may be a buyout candidate for a large multinational bank looking to upgrade its platform. initial loan request generation. What do you think?

Matt Frankel: Dan doesn’t seem like Dan wants to intervene too much on this one, but I love this one. I like the business. I don’t know how this is my biggest hurdle for a niche finance company like this. I don’t know if this is as big an opportunity as others. Like you said, they have a ton of big name competition. I’m not sure I see the big competitive advantage here. Dan, what do you think about solar financing.

Dan Caplinger: I’m just thinking of vertically integrated people like the SunPowers and the Teslas and the Sunruns. I just don’t think there are independent solar contractors out there and that will be of real benefit to them. But I feel like when I look around in the neighborhoods near my home, there are a lot of solar projects going on. I see these big names. They have big name credibility. This is the kind of thing that it is a niche. But I’m also worried about the potential for growth.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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