Critical Review: CSLM Acquisition (NASDAQ:SPWR) and FTC Solar (NASDAQ:FTCI)

FTC Solar (NASDAQ:FTCI) and CSLM Acquisition (NASDAQ:SPWR) are both small-cap energy companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, earnings, profitability, risk, analyst recommendations and dividends.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for FTC Solar and CSLM Acquisition, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
FTC Solar	1	3	3	0	2.29
CSLM Acquisition	0	2	1	1	2.75

FTC Solar presently has a consensus target price of $9.20, indicating a potential downside of 22.95%. CSLM Acquisition has a consensus target price of $5.40, indicating a potential upside of 233.33%. Given CSLM Acquisition’s stronger consensus rating and higher possible upside, analysts clearly believe CSLM Acquisition is more favorable than FTC Solar.

Volatility and Risk

FTC Solar has a beta of 1.45, suggesting that its share price is 45% more volatile than the S&P 500. Comparatively, CSLM Acquisition has a beta of 0.8, suggesting that its share price is 20% less volatile than the S&P 500.

Profitability

This table compares FTC Solar and CSLM Acquisition’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
FTC Solar	-69.25%	-549.96%	-44.59%
CSLM Acquisition	5.11%	-16.64%	10.18%

Valuation & Earnings

This table compares FTC Solar and CSLM Acquisition”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
FTC Solar	$47.35 million	3.77	-$48.61 million	($4.33)	-2.76
CSLM Acquisition	$108.74 million	1.24	-$56.45 million	($0.47)	-3.45

FTC Solar has higher earnings, but lower revenue than CSLM Acquisition. CSLM Acquisition is trading at a lower price-to-earnings ratio than FTC Solar, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

45.4% of FTC Solar shares are owned by institutional investors. Comparatively, 47.4% of CSLM Acquisition shares are owned by institutional investors. 21.0% of FTC Solar shares are owned by company insiders. Comparatively, 32.3% of CSLM Acquisition shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

CSLM Acquisition beats FTC Solar on 10 of the 15 factors compared between the two stocks.

About FTC Solar

FTC Solar, Inc. engages in the provision of solar tracker systems, software, and engineering services in the United States, Asia, Europe, the Middle East, North Africa, South Africa, and Australia. The company offers a self-powered, two-panel in-portrait, and single-axis tracker solution under the Voyager brand name; and a one module-in-portrait solar tracker solution under the Pioneer brand name. Its customers include project developers and solar asset owners, as well as engineering, procurement, and construction contractors that design and build solar energy projects. The company was incorporated in 2017 and is headquartered in Austin, Texas.

About CSLM Acquisition

Complete Solaria, Inc. engages in the provision of solar services. It offers sales enablement, project management, partner coordination, and customer communication. The company is headquartered in San Ramon, CA and does business as SunPower Corporation.