Is Canadian Solar (CSIQ) Stock Undervalued Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Canadian Solar (CSIQ) is a stock many investors are watching right now. CSIQ is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
We should also highlight that CSIQ has a P/B ratio of 1.48. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. CSIQ's current P/B looks attractive when compared to its industry's average P/B of 2.93. Over the past 12 months, CSIQ's P/B has been as high as 1.69 and as low as 0.55, with a median of 0.86.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CSIQ has a P/S ratio of 0.7. This compares to its industry's average P/S of 1.4.
Finally, investors will want to recognize that CSIQ has a P/CF ratio of 5.55. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 21.54. Within the past 12 months, CSIQ's P/CF has been as high as 6.33 and as low as 1.93, with a median of 3.36.
These are just a handful of the figures considered in Canadian Solar's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CSIQ is an impressive value stock right now.
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