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Sunnova Energy (NOVA) Surges 5.4%: Is This an Indication of Further Gains?

Sunnova Energy NOVA shares soared 5.4% in the last trading session to close at $38.30. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 0.4% loss over the past four weeks.

Sunnova’s shares have been rallying ever since it revealed its Environmental, Social, and Governance (ESG) Report on Apr 12. Notably, the report states that the company has generated 2.4 billion KWH of clean energy as of Dec 31, 2020.

Another factor that seems to have positively contributed to Sunnova’s share price lately is the reaffirmation of the pending merger between StemGen and Star Peak Energy Transition. For investors’ note, Michael Morgan is the chairman of Star Peak Energy and also serves as a director of Sunnova.

Price and Consensus

This residential solar company is expected to post quarterly loss of $0.34 per share in its upcoming report, which represents a year-over-year change of +60%. Revenues are expected to be $43.77 million, up 46.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Sunnova Energy, the consensus EPS estimate for the quarter has been revised 1.8% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on NOVA going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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