.jpg "Here are the 7 upcoming solar stocks you should put on your must-buy list")
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Industry analysts have been predicting the future winners of solar stocks for decades, but the cost of solar power has always been a double-edged sword. The problem was that the cost per megawatt hour was too high. Bloomberg New Energy Finance shows the price has fallen significantly over the past seven years .
This is one of the reasons why now is the time for investors to consider investing in solar power. The other is expected growth. The global solar market is expected to grow at a compound annual growth rate (CAGR) of 6.9% until 2028 .
This means that operating revenue will grow from $234.86 billion in 2022 to $373.84 billion in 2029.
Not all titles on this list meet the "coming soon" definition. However, since the industry has been so bad this year, solar companies are also sending off their shares.
The clean energy transition may take decades, but it will not disappear. Here are seven companies that look like they will be future solar title winners.
SolarEdge Technologies (SEDG)
SolarEdge Technologies (NASDAQ: SEDG ) may be the most prominent name on this list of future solar stock winners. SolarEdge is an Israeli company that manufactures and sells complete solar solutions for residential and commercial customers .
The company expects strong growth in Germany and Italy. Russia's war on Ukraine makes renewable energy solutions even more urgent. Customers in these countries are still looking for complete solar power solutions, including batteries to power them.
In August 2023, SolarEdge reported record revenue of $991.3 million and record solar revenue of $947.4 million. The company also achieved a gross margin of 32%. Both revenue and earnings per share increased year-over-year, maintaining a consistent trend for several quarters.
We expect profits to grow by more than 30% in 2023. That would be enough to support analysts' estimates for a 108% rise in SEDG shares, which are trading at the end of a 52-week range.
Altus Power (AMPS)
Altus Power (NYSE: AMPS ) offers its customers the benefits of solar power without requiring the customer to install solar panels or change their existing bill.
They achieve this by investing in large community solar parks and supporting their development. The company is the largest commercial solar operator in the United States with 698 MW of capacity in 25 states .
Altus' story is one of growth. The company earned $46.5 million in its August earnings report , but what caught investors' attention was the company's earnings of four cents per share. In addition to its estimate by two cents per share, it erased two-quarters of the negative earnings.
Earnings are expected to grow by 112.50%. Well, AMPS stock's 57% upside forecast may be too low.
Mass Technology (ARRY)
Array Technologies (NASDAQ:ARRY ) offers an easy way to invest in the future of winning solar stocks. The company manufactures solar trackers .
That seems to tie Array's fate to the solar panel industry. And for various reasons, including weather conditions, the projected growth of the solar sector this year has not been as strong as expected.
Array continues to experience annual revenue growth and a backlog of $1.7 billion , which should give investors confidence that the company's growth trajectory will continue. Profits are expected to rise 39 percent next year.
This can be fully reflected in analysts' estimates. However, higher price targets will be achieved if the company continues to deliver annual revenue and earnings growth. Currently, 18 out of 22 analysts give ARRY a Buy or Strong Buy rating.
Sunnova Energy International (NOVA)
Sunnova Energy International (NYSE: NOVA ) is a leading national residential solar company. In addition to solar panels, the company offers whole-home energy storage solutions, including maintenance, monitoring, repairs and replacements.
The company serves 350,000 customers in more than 25 states and territories.
Sunnova is a small-cap company with a market capitalization of $1.62 billion. Revenue is not Sunnova's problem. They continue to show year-on-year growth. However, there are concerns about the company's bottom line. In addition to not being a profitable company, the losses continue to mount.
This has some analysts pointing the finger at the company's debt situation. And that's a legitimate concern.
However, the company expects to exceed $1 billion in sales by 2024 . If they can reach this milestone, they should see positive earnings and revenue growth.
solar systems (SUNW)
With a market cap of $34 million, Sunworks (NASDAQ: SUNW ) is the smallest of the winning solar futures stocks. The 22-year-old company bills itself as a "leading supplier of high-performance solar power systems."
The company's sales increased dramatically in 2021 and 2022. The company's stock price soared, trading at over $20 per share at the end of 2021.
This year was a different story, but it could have been a perfect opportunity for investors.
Revenue is falling year after year and the company is still not profitable, but revenue is still significantly higher than in 2019, but this increase is not reflected in the company's share price.
On the other hand, investors may avoid SUNW stock after the company announced a $3.3 billion direct offering on August 9, 2023 . Shares fell 29% after the announcement, falling below the crucial $1 mark.
With that in mind, SUNW stock is best left to traders. However, long-term investors should keep Sunworks on their watch list.
Daqo New Energy (DQ)
Daqo New Energy (NYSE: DQ ) is another company on this list of future solar stock winners. At a time when many investors are looking to invest in stocks not because of China, but because of China, know that these are Chinese stocks. The world's leading manufacturer of high porosity polysilicon is based in Shanghai.
China is the world's largest producer of solar panels. This was a catalyst for the company in 2021 and 2022, with record sales. This growth slowed in 2023, likely due to China's economic slowdown.
However, Daqo is a Chinese stock that offers a stable risk-reward profile. DQ stock currently has a forward P/E of 3.8x. Although analysts believe that the stock may not benefit much, it is a stock that could reward risk-tolerant investors if the solar industry recovers as expected.
Shoals Technology Group (SHLS)
Shoals Technologies (NASDAQ: SHLS ) makes this list of future solar share winners thanks to the company's "Made in the USA" focus. When land space becomes a priority, Shoals stand out.
The company is a leading supplier of electrical system components and solutions for solar products. Shoals also sells solutions for charging electric vehicles.
Like many of the companies on this list, Shoals is experiencing strong year-over-year revenue growth. However, Shoals has strong profitability, with earnings growth expected to exceed 60% over the next 12 months.
At 39 times forward earnings, SHLK stock isn't cheap. However, analysts are discounting this earnings growth in their models, as the consensus price target puts the stock at 59% upside potential.
Chris Maro had no direct or indirect positions in the shares mentioned in this article at the time of publication. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com's publication guidelines .
Chris Marok is a freelance financial writer who has been covering the market for over five years. He has been writing for InvestorPlace since 2019.
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