www.thestreet.com/story/12439142/1/...e-solarcitys-shadow.html
... Since our original recommendation the company, which began trading as RGS Energy (RGSE) Monday, has appreciated by 54%.
Based on our conservative estimates, RGSE has another 132% upside. Its stock is down nearly 2% Monday but for the year to date it is up 23.5%. The S&P 500 is up only 4.9%, by comparison.
RGSE is expecting sales to reach $132 million in 2013. Management has done a great job increasing operating efficiency while the operating margin of its big competitor,SolarCity (SCTY_), continues to rack up losses with the prospects of future returns. SCTY's biggest shareholder is Elon Musk, Tesla
SCTY trades on an EV/Sales multiple of 47 and RGSE trades on an EV/sales multiple of 1.63. The massive discrepancy is unwarranted and RGS Energy should trade on a much higher multiple.
Assuming an extremely conservative EV/sales multiple of 3 -- still 1/16th the multiple the market places on SolarCity -- RGS Energy would be valued at $9.22 per share, or 132% upside.