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Canadian Solar (CSIQ)
:CSIQ
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Canadian Solar
(NASDAQ:CSIQ)53Neutral
Positive Factors
Growth in energy storage
Canadian Solar's energy storage business is a growth engine that helps offset weaker solar margins and has taken market share due to strong solar customer relationships.
Strategic investments
The Recurrent business benefits from a $500 million equity investment by BlackRock, supporting around 3 GW of solar development.
Negative Factors
Competition and profitability
Profitability is expected to deteriorate due to increasing competition and challenges in sourcing cells from countries not subject to tariffs.
Revenue and shipment expectations
The company is projected to have module shipments below company guidance, indicating challenges in meeting targets.
Tariff and duty challenges
The North American business of Canadian Solar faces multiple tariff and duty related headwinds, impacting a significant portion of its revenue.
Canadian Solar (CSIQ) vs. S&P 500 (SPY)
Market Cap
$674.32M
Dividend YieldN/A
Average Volume (3M)1.70M
Price to Earnings (P/E)737.2
Beta (1Y)1.34
Revenue Growth-21.68%
EPS Growth-99.75%
CountryUS
Employees22,234
SectorTechnology
Sector Strength48
IndustryRenewable Energy Producers
Share Statistics
EPS (TTM)0.01
Shares Outstanding66,174,920
10 Day Avg. Volume2,157,388
30 Day Avg. Volume1,702,242
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.09
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.71Price Target Upside25.84% Upside
Rating ConsensusHold
Number of Analyst Covering7
Canadian Solar Business Overview & Revenue Model
Company DescriptionCanadian Solar, Inc. engages in the manufacture of solar photovoltaic modules and a provider of solar energy solutions. It operates through the Module and System Solutions (MSS), and Energy segments. The MSS segment involves in the design, development, manufacture, and sales of solar power products and solar system kits, and operation and maintenance services. The Energy segment comprises primarily of the development and sale of solar projects, operating solar power projects and the sale of electricity. The company was founded by Shawn Qu in October 2001 and is headquartered in Guelph, Canada.
How the Company Makes MoneyCanadian Solar generates revenue primarily through two main business segments: module and system solutions, and energy. In the module and system solutions segment, the company earns money by manufacturing and selling solar modules, which are distributed globally to residential, commercial, and industrial customers. This segment also includes the provision of solar system kits and other solar-related products. In the energy segment, Canadian Solar develops, constructs, and sells solar power plants. It earns additional revenue by providing operations and maintenance services for these plants. The company also operates some of its solar power plants, generating income from the sale of electricity. Significant partnerships with governments, financial institutions, and utility companies worldwide help facilitate project development and expansion, further contributing to its earnings.
Canadian Solar Financial Statement Overview
Summary
Canadian Solar faces profitability and cash flow challenges, with a declining gross profit margin and a sharp decrease in net profit margin. Revenue and EBIT margin declines indicate operational pressures. The balance sheet shows significant leverage, with a high debt-to-equity ratio and low return on equity, despite a substantial cash reserve. Cash flow management issues are evident, with negative free cash flow growth and operational cash flow challenges.Income Statement
The income statement shows a moderate performance with a declining gross profit margin from 16.81% in 2023 to 16.12% TTM (Trailing-Twelve-Months). The net profit margin saw a sharp decline to 0.01% TTM from 3.60% in 2023, indicating profitability challenges. Revenue growth is negative, with a decrease of 18.89% from 2023 to TTM. The EBIT margin also decreased to 1.02% TTM, reflecting pressure on operational efficiency. However, EBITDA margin remains relatively stable at 6.76% TTM.70
Positive
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 2.08 TTM, suggesting significant leverage. Return on equity decreased to 0.03% TTM, indicating challenges in generating returns on equity. The equity ratio is relatively low at 20.85% TTM, showing moderate financial stability. Despite the high leverage, the company has a substantial cash reserve.60
Neutral
Cash Flow
The cash flow statement indicates deterioration, with free cash flow declining significantly. Free cash flow growth rate is negative at -205.14% TTM, and operating cash flow to net income ratio is negative, reflecting operational cash flow challenges. The free cash flow to net income ratio is also negative, highlighting cash flow management issues.50
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 6.17B | 7.61B | 7.47B | 5.28B | 3.48B | 3.20B | Gross Profit |
| 995.69M | 1.28B | 1.26B | 909.31M | 689.91M | 718.50M | EBIT |
| 63.13M | 453.32M | 356.06M | -81.34M | 20.62M | 111.19M | EBITDA |
| 417.19M | 829.66M | 675.15M | 494.31M | 423.51M | 439.62M | Net Income Common Stockholders |
| 762.00K | 274.19M | 239.97M | 95.25M | 146.70M | 171.59M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 848.03M | 1.94B | 981.43M | 869.83M | 1.18B | 668.77M | Total Assets |
| 9.83B | 11.90B | 9.04B | 7.39B | 6.54B | 5.47B | Total Debt |
| 4.55B | 4.48B | 4.01B | 3.26B | 2.81B | 2.42B | Net Debt |
| 3.71B | 2.54B | 3.03B | 2.39B | 1.63B | 1.75B | Total Liabilities |
| 7.40B | 8.19B | 6.73B | 5.26B | 4.64B | 4.04B | Stockholders Equity |
| 2.05B | 2.56B | 1.94B | 1.80B | 1.57B | 1.39B |
| Cash Flow | Free Cash Flow | ||||
| -2.57B | -840.85M | 288.63M | -837.75M | -455.48M | 308.93M | Operating Cash Flow |
| -760.71M | 684.62M | 916.63M | -408.25M | -120.54M | 600.11M | Investing Cash Flow |
| -1.82B | -1.67B | -630.49M | -429.57M | -319.66M | -294.10M | Financing Cash Flow |
| 2.41B | 2.05B | 428.64M | 614.07M | 823.50M | -34.61M |
Canadian Solar Technical Analysis
Negative
10.10
Price Trends
10.95
Negative
11.86
Negative
13.68
Negative
Market Momentum
-0.13
Positive
44.01
Neutral
21.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSIQ, the sentiment is Negative. The current price of 10.1 is below the 20-day moving average (MA) of 10.51, below the 50-day MA of 10.95, and below the 200-day MA of 13.68, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 44.01 is Neutral, neither overbought nor oversold. The STOCH value of 21.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSIQ.
Canadian Solar Risk Analysis
Canadian Solar disclosed 63 risk factors in its most recent earnings report. Canadian Solar reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Canadian Solar Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $14.05B | 10.89 | 17.62% | ― | 26.75% | 55.24% | |
69 Neutral | $1.17B | 15.73 | 17.10% | 14.02% | -11.91% | -87.40% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
56 Neutral | $872.33M | ― | -116.01% | ― | -68.86% | -4917.87% | |
53 Neutral | $674.32M | 737.23 | 0.03% | ― | -21.68% | -99.75% | |
46 Neutral | $1.52B | ― | -73.12% | ― | -9.83% | -71.44% | |
33 Underperform | $49.54M | ― | 307.38% | ― | -43.42% | -53.77% |
* Technology Sector Average
Performance Comparison
CSIQ
Canadian Solar
10.10
-10.25
-50.37%
FSLR
First Solar
130.90
-27.52
-17.37%
JKS
JinkoSolar
22.91
-2.59
-10.16%
SEDG
SolarEdge Technologies
15.59
-54.77
-77.84%
RUN
Sunrun
6.90
-5.34
-43.63%
MAXN
Maxeon Solar Technologies
3.24
-398.76
-99.19%
Canadian Solar Earnings Call Summary
Earnings Call Date: Dec 5, 2024 | % Change Since: -16.32% | Next Earnings Date: Mar 25, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments such as strong shipments, gross margin exceeding guidance, and significant investments in American manufacturing, alongside challenges like ongoing industry pressures, a net loss for the quarter, and project delays. The company remains well-positioned for growth but faces hurdles due to market conditions and regulatory changes.Highlights
Strong Solar Module and Energy Storage Shipments
In the third quarter, Canadian Solar shipped 8.4 gigawatts of solar modules and 1.8 gigawatt hours of battery energy storage solutions. Shipments to North America accounted for over 30% of total shipments.
Gross Margin Exceeds Guidance
Canadian Solar reported a gross margin of 16.4% for the third quarter, surpassing guidance despite industry challenges.
Expansion in American Manufacturing
Canadian Solar is investing nearly $2 billion in American manufacturing, including a new facility in Kentucky for battery cells, aiming to employ over 4,000 people across Texas, Indiana, and Kentucky.
Record Backlog in e-STORAGE
The e-STORAGE business achieved record shipments of 1.8 gigawatt hours and grew its backlog to $3.2 billion as of November 30.
Partnership with SOLARCYCLE
Canadian Solar partnered with SOLARCYCLE to offer comprehensive recycling services to U.S. customers, showcasing its commitment to sustainability.
Lowlights
Ongoing Industry Challenges
The solar market faces pressures such as geopolitical challenges, trade barriers, fierce price competition, and ongoing patent disputes.
Net Loss for the Quarter
Canadian Solar reported a net loss of $6 million for the third quarter, impacted by intra-group eliminations and the absence of significant project sales.
Project Delays in Recurrent Energy
Project sales were delayed into the next quarter and next year, contributing to an operating loss of $21 million for Recurrent Energy.
Impact of Tariff Announcements
The preliminary antidumping duties announced at 80% pose a challenge for maintaining U.S. market share, requiring strategic adjustments.
Company Guidance
During Canadian Solar's Q3 2024 earnings call, the company provided guidance for the upcoming quarter and year. For Q4 2024, Canadian Solar anticipates solar module shipments between 8 to 8.5 gigawatts, with battery energy storage shipments ranging from 2 to 2.4 gigawatt hours. Despite intra-group eliminations, this is expected to be their largest storage quarter to date. Revenue forecasts for the fourth quarter are projected to be between $1.5 billion and $1.7 billion, with gross margins expected to range from 16% to 18%. Looking into 2025, the company projects total solar module shipments between 30 to 35 gigawatts and battery energy storage shipments ranging from 11 to 13 gigawatt hours, including allocations for their own projects. The company plans to manage through market uncertainties with a focus on sustainable growth and rigorous risk management.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.