SolarCity Corp SCTY 10.59% has announced a $227 million cash equity raise, a move that could ease the worries of traders concerned with the company’s softening guidance. Avondale Partners analyst Michael Morosi sees the cash financing as a “major catalyst” for the stock.

According to Morosi, market concerns over SolarCity’s growth are misplaced to begin with. Avondale sees some risk to the company’s 40 percent growth target, especially after such a weak Q1. However, he pointed out that SolarCity’s stock is not valued as a growth stock.

“With ~$15/share of net asset value on the balance sheet, the company’s DevCo is valued at 4x EV/Adjusted EBIT, which is not exactly consistent with a 40 percent grower,” Morosi explained.

SolarCity’s latest cash equity financing comes on the heels of more than $1 billion in capital that the company has raised in the past two months and will serve to improve the company’s cash flows and de-risk its portfolio.

Morosi believes…

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