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Monday, October 16, 2006

Evergreen Solar Pops on Contract Win

Evergreen Solar (ESLR) has popped 14% in early trading to $9.39 on a “$100 million contract” announcement this morning. This is the sort of things that low-priced stock traders love to see in alternative energy stocks, and it has ESLR stock trading up.

Evergreen Solar will ship approximately $100 million of photovoltaic modules to Mainstream Energy over the next four years to Mainstream Energy LLC. The Mainstream sales agreement is Evergreen Solar's sixth major contract in the past 12 months. The value of these six contracts totals more than $700 million over the next five years, according to the company.

While a 14% gain is always impressive the stock was only about 16% above its 52-week lows of $7.27 before this contract announcement, as many alternative energy stocks have been battered as oil and energy prices have come down from the stratosphere. It now has a market cap of roughly $630 million. If you want to compare this “up to $25 million per year” as far as the company itself, the street expects Evergreen to post Fiscal 2006 revenues of $99 million and to post Fiscal 2007 revenues of over $170 million. The company is not widely expected to be profitable until 2008 or beyond.

Jon C. Ogg
October 16, 2006
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