SunPower to acquire Ambia Solar in $37.5 million equity deal

SunPower (SPWR) has agreed to acquire Ambia Solar for $37.5 million in equity, a strategic move projected to add $83.6 million to its 2025 revenue and contribute to an analyst-forecasted 174% revenue growth for the year. This acquisition, expected to close in Q4 2025, is designed to mitigate the impact of the 2026 homeowner Investment Tax Credit reduction, as a significant portion of Ambia's backlog is unaffected. While SunPower has not been profitable over the last twelve months, analysts predict the company will achieve profitability in FY2025, with the stock currently appearing undervalued.

Analysis

SunPower (SPWR) has agreed to acquire Ambia Solar for $37.5 million in equity, a strategic move projected to significantly enhance its revenue base. This acquisition, expected to close in Q4 2025, is anticipated to add $83.6 million to SunPower's 2025 revenue, contributing to an analyst-forecasted 174% revenue growth for fiscal year 2025, with Ambia's revenue specifically starting in Q1 2026. SunPower itself forecasts $303.4 million in revenue for 2025, building on $244.47 million over the last twelve months.

The acquisition is strategically timed to mitigate the impact of a projected 13% reduction in the homeowner Investment Tax Credit (ITC) in 2026, as 72% of Ambia’s backlog is Third Party Ownership funded and thus unaffected by the ITC change. While SunPower has not been profitable over the last twelve months, analysts predict profitability for FY2025 with an EPS forecast of $0.08. The company maintains its forecast for record revenue and operating income in Q4 2025 and profitability in Q1 2026.

InvestingPro's Fair Value assessment indicates SunPower's stock appears undervalued, with analyst high targets reaching $6 per share against a current price of $1.69. This follows SunPower's recent acquisition of Sunder Energy, which positioned it as the fifth-largest residential solar installer in the U.S. and significantly boosted its sales capabilities. These consecutive strategic acquisitions underscore a clear growth strategy within the residential solar market.

The integration plan includes Ambia’s founding CEO Conner Ruggio leading SunPower’s Blue Raven division, into which Ambia will merge, while current Blue Raven leader Steve Erickson transitions to head SunPower’s new Battery Division. This leadership restructuring aims to optimize the combined entities and capitalize on emerging market segments.

Key Decisions for Investors

• Consider the significant revenue growth potential and strategic positioning from recent acquisitions, particularly how Ambia's backlog mitigates future ITC risks.
• Monitor the successful integration of Ambia Solar and its contribution to Q1 2026 revenue and overall profitability targets.
• Evaluate the company's ability to achieve projected profitability in FY2025 and maintain its undervalued status against analyst price targets.