SolarMax Technology, Inc. (NASDAQ: SMXT)

Sector: Technology Industry: Solar CIK: 0001519472
Market Cap 36.93 Mn
P/B -3.14
P/E -3.95
P/S 0.73
ROIC (Qtr) -32.33
Div Yield % 0.00
Rev 1y % (Qtr) 383.33
Total Debt (Qtr) 28.29 Mn
Debt/Equity (Qtr) -2.40
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About

SolarMax Technology, Inc., known by its ticker symbol SMXT, is a prominent player in the solar and renewable energy industry, with operations in two segments: the United States and China. The company's headquarters are located in Riverside, California, and it was established in 2008. The primary business activities of SolarMax Technology, Inc. encompass the design, installation, and sale of photovoltaic (PV) solar energy systems and battery backup systems, primarily targeting residential and commercial customers in the United States. In addition,...

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Investment thesis

Bull case

  • Long-term investments of 13.11M provide solid 1.29x coverage of long-term debt 10.14M, indicating strategic financial planning.
  • Retained earnings of (109.04M) represent substantial 9.26x of equity (11.78M), indicating strong internal capital generation.
  • Tangible assets of 58.66M provide robust 4.42x coverage of other current liabilities 13.28M, indicating strong asset backing.
  • Cash reserves of 5.72M provide solid 2.04x coverage of other non-current liabilities 2.80M, indicating strong liquidity.
  • Cash reserves of 5.72M exceed inventory value of 1.61M by 3.55x, indicating strong liquidity and inventory management.

Bear case

  • Operating cash flow of 1.71M barely covers its investment activities of 2.01M, with a coverage ratio of 0.85, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • High receivables of 14.35M relative to inventory of 1.61M (8.90 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of 1.71M shows concerning coverage of stock compensation expenses of 520720, with a 3.28 ratio indicating potential earnings quality issues.
  • Operating earnings of (6.84M) show weak coverage of depreciation charges of 1.58M, with a -4.34 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 1.71M provides minimal 1.65x coverage of tax expenses of 1.03M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Solar
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 FSLR First Solar, Inc. 24.22 Bn 17.30 4.80 0.55 Bn
2 NXT Nextpower Inc. 18.09 Bn 30.50 5.02 0.00 Bn
3 ENPH Enphase Energy, Inc. 6.00 Bn 34.84 4.07 1.20 Bn
4 RUN Sunrun Inc. 4.28 Bn -1.73 1.85 14.69 Bn
5 SEDG Solaredge Technologies, Inc. 2.16 Bn -3.68 2.12 0.40 Bn
6 SHLS Shoals Technologies Group, Inc. 1.87 Bn 56.32 4.32 0.17 Bn
7 ARRY Array Technologies, Inc. 1.73 Bn -18.82 1.30 0.68 Bn
8 JKS JinkoSolar Holding Co., Ltd. 1.37 Bn -2.86 0.14 6.93 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.16 1.41
EV to Cash from Ops. EV/CFO 39.87 3.45
EV to Debt EV to Debt 2.40 6.34
EV to EBIT EV/EBIT -9.94 22.16
EV to EBITDA EV/EBITDA -12.95 5.58
EV to Free Cash Flow [EV/FCF] EV/FCF 39.87 9.74
EV to Market Cap EV to Market Cap 1.84 2.40
EV to Revenue EV/Rev 1.34 312.86
Price to Book Value [P/B] P/B -3.14 0.12
Price to Earnings [P/E] P/E -3.95 -3.59
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -9.53
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.00
Dividend per Basic Share Div per Share (Qtr) 0.00 0.00
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.00
Interest Coverage Int. cover (Qtr) -4.61 -54.67
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.00 -54.29
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 552.75 50.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 73.87 3.75
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 82.37 -309.44
EBIT Growth (1y) % EBIT 1y % (Qtr) 76.95 -42.85
EBT Growth (1y) % EBT 1y % (Qtr) 73.35 -48.74
EPS Growth (1y) % EPS 1y % (Qtr) 73.61 -74.61
FCF Growth (1y) % FCF 1y % (Qtr) 151.41 4.39
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -9.59 701.13
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.87 0.65
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 0.10 0.39
Current Ratio Curr Ratio (Qtr) 0.73 1.43
Debt to Equity Ratio Debt/Equity (Qtr) -2.40 0.31
Interest Cover Ratio Int Coverage (Qtr) -4.61 -54.67
Times Interest Earned Times Interest Earned (Qtr) -4.61 -54.67
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -10.40 -907.38
EBIT Margin % EBIT Margin % (Qtr) -13.45 -994.26
EBT Margin % EBT Margin % (Qtr) -16.37 -1,508.47
Gross Margin % Gross Margin % (Qtr) 7.70 10.82
Net Profit Margin % Net Margin % (Qtr) -18.40 -1,462.08