JKS vs. RUN: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Solar sector have probably already heard of JinkoSolar (JKS) and Sunrun (RUN). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
JinkoSolar has a Zacks Rank of #2 (Buy), while Sunrun has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that JKS is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
JKS currently has a forward P/E ratio of 5.34, while RUN has a forward P/E of 34.42. We also note that JKS has a PEG ratio of 0.27. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RUN currently has a PEG ratio of 6.88.
Another notable valuation metric for JKS is its P/B ratio of 0.50. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RUN has a P/B of 1.64.
Based on these metrics and many more, JKS holds a Value grade of A, while RUN has a Value grade of D.
JKS sticks out from RUN in both our Zacks Rank and Style Scores models, so value investors will likely feel that JKS is the better option right now.
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JinkoSolar Holding Company Limited (JKS): Free Stock Analysis Report
Sunrun Inc. (RUN): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.