Canadian Solar Is Undeservedly Cheap I view the current stock market malaise as potentially a “Black Friday” event for stocks. Of course, the... Canadian Solar Stock Is Trading at a Big Discount to Expected Growth
canadian solar stock

Canadian Solar Is Undeservedly Cheap

I view the current stock market malaise as potentially a “Black Friday” event for stocks. Of course, the situation could worsen if there is no resolution to the U.S.-China trade war and if bond yields ratchet higher. It’s always a difficult task to pick a bottom.

But the thing is, employing a strategy to add positions on weakness (as long as you’re willing to ride out the bumps and look to the long term) makes sense.

An area that I continue to see opportunities in is solar power, regardless of the notion that the Donald Trump administration doesn’t fully support efforts against climate change.

The reality is that we are not heading toward a coal power revolution or dumping high-tech alternative energy solutions. There are simply too many jobs in the alternative energy space.


A small-cap solar technology stock that is delivering strong growth—but is way undervalued—is Canadian Solar Inc. (NASDAQ:CSIQ).

CSIQ stock is down 5.1% this year but has rallied 12.1% over the last trading week. At the current level, CSIQ stock is cheap.

Canadian Solar has operations in 20 countries, with sales to over 90 countries. The company deals with both small- and large-scale commercial solar energy projects.

On the chart, CSIQ is facing key resistance at around $19.00. A break could see Canadian Solar vault higher toward $28.00 and $35.00.

Chart courtesy of

The Proof Is in the Numbers for CSIQ Stock

Canadian Solar’s five-year revenue trend saw its revenue double from 2013 to 2017. There was revenue growth in three of the last four years.

Fiscal Year Revenue (Billions) Growth
2013 $1.7
2014 $3.0 79%
2015 $3.5 17.1%
2016 $2.9 -17.7%
2017 $3.4 18.8%

(Source: “Canadian Solar Inc.,” MarketWatch, last accessed November 19, 2018.)

Canadian Solar is estimated to have revenue growth of 8.3% to $3.7 billion in 2018. Revenue is then expected to hit $4.0 billion in 2019, with a high estimate of $4.7 billion. (Source: “Canadian Solar Inc. (CSIQ),” Yahoo! Finance, last accessed November 19, 2018.)

In addition, Canadian Solar generates strong earnings before interest, taxes, depreciation, and amortization (EBITDA) and profits.

Fiscal Year EBITDA (Millions) Growth
2013 $211.6
2014 $449.0 112.1%
2015 $343.2 -23.6%
2016 $146.5 -57.3%
2017 $321.1 119.2%

(Source: MarketWatch, op cit.)

The company’s earnings per share (EPS) trend is positive, which bodes well for CSIQ stock.

Fiscal Year Diluted EPS Growth
2013 $0.63
2014 $4.11 552.4%
2015 $2.93 -28.7%
2016 $1.12 -61.8%
2017 $1.69 50.9%

(Source: MarketWatch, op cit.)

Canadian Solar is estimated to earn $1.61 per diluted share this year, but that number could end up being as high as $1.98. In 2019, Canadian Solar could report $2.36 per diluted share at the high end. (Source: Yahoo! Finance, op cit.)

CSIQ had positive free cash flow (FCF) in 2013 and 2014 but had negative FCF in the past three years as the company worked on growing and strengthening its position.

Fiscal Year Free Cash Flow (Millions)
2013 $88.7
2014 $169.4
2015 -$345.6
2016 -$1,250
2017 -$346.2

(Source: MarketWatch, op cit.)

Analyst Take

Canadian Solar is a sound play on the global solar segment. The company is producing some strong fundamentals that deserve a higher stock price.

The fact that CSIQ stock trades at only 8.8 times its consensus 2019 EPS and almost 6.8 times its high estimates imply a potentially strong upside move.

The price/earnings to growth (PEG) ratio of 0.43 is a bargain, and CSIQ stock trades below its book value.

MJ Shareholders avatar

MJ Shareholders is the largest dedicated financial network and leading corporate communications firm serving the legal cannabis industry. Our network aims to connect public marijuana companies with these focused cannabis audiences across the US and Canada that are critical for growth: Short and long term cannabis investors Active funding sources Mainstream media Business leaders Cannabis consumers

No comments so far.

Be first to leave comment below.

( ) ( ) ( ) ( ) ( ) ( ) ( ) ( )