SolarCity(NASDAQ: SCTY ) hit the public market in December, with an initial public offering price of $8 per share. The stock charged ahead in its first day of trading to close at $11.79, or 47% above its initial offering price. The fun didn't stop there. Shares continued to gain momentum in the months following its IPO. In fact, shares are up more than 55% year to date.
That's not bad for a company backed by rocket man Elon Musk. If you remember, Musk's electric-car company, Tesla Motors (NASDAQ: TSLA ) , was one of the most shorted stocks on the Nasdaq following its IPO. We'll get back to that in a minute. First, let's shed some light on where SolarCity is headed in 2013 and see whether this stock is worthy of your portfolio.
Seeing the light
SolarCity, which installs solar panels and helps customers finance them, is trying to survive in a market that has burned investors in the past. Of course, it hasn't been easy for the company to gain investor confidence when the pain of past failures, such as Solyndra, is still fresh in investors' minds.
However, SolarCity is somewhat immune to the cost pressures that have unraveled other solar energy companies before it. Unlike names such as First Solar (NASDAQ: FSLR ) or Trina Solar, SolarCity doesn't manufacture the solar panels. SolarCity found its niche in leasing panels to corporate and residential customers and overseeing the financing of such installations。
Meanwhile, First Solar and Trina Solar are locked in price and efficiency wars over the panels they produce. In fact, fellow Fool Travis Hoium recently explained in depth how First Solar's module manufacturing business is dragging down the company. While it makes sense for a company like First Solar to transition to a solar systems-focused business, it would mean increased competition for SolarCity.
Today, SolarCity stands out as the largest installer of residential solar energy systems in the United States. Still, it hasn't yet earned a profit. The company just reported a wider-than-expected loss for its fourth quarter, its first as a public company.
SolarCity reported a net loss of $1.10 per share on revenue of $28 million for the period, because of increased operating costs. Analysts on average had estimated a per share loss of $0.54, according to Reuters.
But despite the disappointing earnings, SolarCity has one thing its solar peers don't: The company's chairman is billionaire entrepreneur Elon Musk.