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Tuesday, October 20, 2020

Canadian Solar Inc. (NASDAQ:CSIQ) Stock is Plummeting, Here is Why

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Canadian Solar Inc. (CSIQ) shares are trading at lower $38.91 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $33.70.

To add more color to this target, the company’s high over the last year is $42.74 and the low is $12.00. Over the last 52 weeks, CSIQ is up 114.09% while the S&P 500 is up 16.45%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, CSIQ reported a profit of $147.21 million. Canadian Solar Inc. also saw revenues increase to $695.85 million. In addition, CSIQ has free cash flow of $0.0 as of 06-2020. The company’s EBITDA came in at $45.47 million which compares well with its peers.

CSIQ booked profit margins of 8.00%, its Return on Equity (ROE) is 18.10%, and its Return on Assets is 4.80%. All told, it is clear that, CSIQ needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. CSIQ has a short ratio of 1.74 and outstanding shares of 59.37M.

Company Outlook

CSIQ has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 3.16 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 4.29. Canadian Solar Inc. CSIQ also noted assets of $5.26 billion at the end of the last quarter. Investors should also keep an eye on sector updates as CSIQ has historically followed its peers on positive news.

All told, Canadian Solar Inc. CSIQ has strung together solid data and demonstrated underlying fundamentals. At its current valuation, CSIQ represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Canadian Solar Inc. CSIQ is now commanding a market cap of 2.18B and a float of 45.07M. CSIQ is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of CSIQ stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in CSIQ, either long or short, and we have not been compensated for this article.

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