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Tigo Energy: Stock hits all-time low as delayed deliveries and cancelations halve revenue

Tigo Energy: Stock hits all-time low as delayed deliveries and cancelations halve revenue
(Courtesy: Nicholas Cappello/Unsplash)

Shares in Tigo Energy were trading near all-time lows on the morning of Oct. 10 after the inverter manufacturer halved revenue guidance for the third quarter.

Tigo CEO Zvi Alon shared preliminary financial results that forecasted the company’s revenue in the range of $17-18 million, down from the previous expectation of $41-45 million.

Alon said a “significant number of customers” have requested Tigo delay purchase order deliveries to the fourth quarter or early in 2024, while a smaller amount of customers have canceled or returned orders.

Tigo’s 12-month backlog is expected to be within the range of $66-68 million.

“We believe the inventory supply in the channel that we previously discussed remains elevated and that these order pushouts reflect the ongoing inventory digestion that our customers are experiencing, along with a general market slowdown affecting our customers in the quarter,” Alon said in a statement.

Tigo began trading publicly (Nasdaq: TYGO) on May 24 following a SPAC merger. TYGO initially traded around $10.76 per share. At the opening bell on Oct. 10, the stock price was $5.16. But Tigo isn’t the only clean energy stock under pressure.

Solar module manufacturer Maxeon closed the trading day on Oct. 9 at an all-time low of $7.40 per share on news of reduced shipments to its largest distributed generation customer in the U.S. and broader market turndown. The stock recovered losses at the start of trading on Oct. 10.

Maxeon CEO Bill Mulligan had previously disclosed a “breached payment” under a master supply agreement with SunPower that resulted in paused shipments in July.

“While this customer has recently made several payments on their outstanding balance and is now close to becoming current, we continue to pause our shipments and engage in good faith towards resolution of certain ongoing claims of breach under the MSA,” Mulligan said in a statement. “We do not have visibility into how quickly such resolution can be achieved.”

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In August, SunPower acknowledged the dispute, adding that it is working “jointly with Maxeon to resolve” the issue.

Nevertheless, Maxeon adjusted EBITDA guidance for Q3 down by approximately $30 million. The company expects 2023 revenues to be in the range of $224-229 million, and shipments to range from 622-632 MW.

Maxeon said plans for a 3 GW cell and module manufacturing facility in Albuquerque, New Mexico remain on track. Engineering and pre-construction work are in progress and environmental surveys have been completed, the company said. Customer negotiations and due diligence on Maxeon’s Department of Energy loan application are also proceeding as planned.

A rendering of Maxeon’s planned 3 GW solar cell and module manufacturing facility in New Mexico. (Courtesy: Maxeon)

Maxeon said restructuring actions are expected to result in a reduction of approximately 15% of the company’s global workforce, with most of the reductions expected to occur by the end of the year.

“As a result of rapidly changing market and industry conditions, we have acted decisively to streamline our operations, invest in new technology, and adjust our mix between the DG and utility-scale markets.  We believe that Maxeon is well positioned to weather this market disruption and come out stronger on the other side,” Mulligan said.