November 28, 2024
Top 10 Stock Canadian Solar Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Canadian Solar – Top 10 Stock in Solar Technology
Canadian Solar is listed as a top 10 stock on November 28, 2024 in the market index Solar Tech because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 44 (44% performer), Obermatt assesses an overall hold recommendation for Canadian Solar on November 28, 2024.
Snapshot: Obermatt Ranks
| Country | Canada |
| Industry | Semiconductors |
| Index | Energy Efficient, Low Waste, Recycling, Solar Tech, NASDAQ |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Canadian Solar Hold
| 360 METRICS | November 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 39 |
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| SAFETY | ||||||||
| SAFETY | 38 |
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| SENTIMENT | ||||||||
| SENTIMENT | 15 |
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| 360° VIEW | ||||||||
| 360° VIEW | 44 |
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ANALYSIS: With an Obermatt 360° View of 44 (better than 44% compared with alternatives), overall professional sentiment and financial characteristics for the stock Canadian Solar are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Canadian Solar. Only the consolidated Value Rank has an attractive rank of 97, which means that the share price of Canadian Solar is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 97% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 39, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 38, meaning the company has a riskier financing structure than 62% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 85% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 15. ...read more
RECOMMENDATION: With a consolidated 360° View of 44, Canadian Solar is worse than 56% of all alternative stock investment opportunities based on the Obermatt Method. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 97. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 39), a riskier financing structure than the competition (Safety Rank of 38), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 15) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. We recommend evaluating whether the future of Canadian Solar is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Canadian Solar. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Canadian Solar negative
ANALYSIS: With an Obermatt Sentiment Rank of 15 (better than 15% compared with alternatives), overall professional sentiment and engagement for the stock Canadian Solar is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Canadian Solar. Analyst Opinions are at a rank of 17 (worse than 83% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 47 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 26, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 74% of competitors). No wonder, the Professional Investors rank is only 5, which means that professional investors hold less stock in this company than in 95% of alternative investment opportunities. Pros tend to stay away from Canadian Solar, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 15 (less encouraging than 85% compared with investment alternatives), Canadian Solar has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Canadian Solar Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 97 (better than 97% compared with alternatives) for 2024, Canadian Solar shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Canadian Solar. Price-to-Sales (P/S) is 95, which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value regarding Canadian Solar's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 100% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 100. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 1% of all competitors have even lower dividend yields than Canadian Solar (a Dividend Yield Rank of 1). 99% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 97, is a buy recommendation based on Canadian Solar's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Canadian Solar Growth Momentum low
| GROWTH METRICS | November 28, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 63 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 16 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 90 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 11 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 39 |
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ANALYSIS: With an Obermatt Growth Rank of 39 (better than 39% compared with alternatives), Canadian Solar shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Canadian Solar. Sales Growth has a rank of 63 which means that currently, professionals expect the company to grow more than 63% of its competitors. Capital Growth is also above 16% of competitors with a rank of 90. But Profit Growth only has a rank of 16, which means that currently professionals expect the company to grow its profits less than 84% of its competitors. And Stock Returns have also been below average with a rank of only 11. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 39, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Canadian Solar Debt Financing Safety below-average
| SAFETY METRICS | November 28, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 15 |
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| REFINANCING | ||||||||
| REFINANCING | 68 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 55 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 38 |
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ANALYSIS: With an Obermatt Safety Rank of 38 (better than 38% compared with alternatives), the company Canadian Solar has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Canadian Solar is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Canadian Solar. Refinancing is at 68, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 68% of its competitors. Liquidity is also good at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 15, which means the company has an above-average debt-to-equity ratio. It has more debt than 85% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 38 (worse than 62% compared with alternatives), Canadian Solar has a financing structure that is riskier than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Canadian Solar could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Canadian Solar Above-Average Financial Performance
| COMBINED PERFORMANCE | November 28, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 97 |
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| GROWTH | ||||||||
| GROWTH | 39 |
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| SAFETY | ||||||||
| SAFETY | 55 |
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| COMBINED | ||||||||
| COMBINED | 61 |
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ANALYSIS: With an Obermatt Combined Rank of 61 (better than 61% compared with investment alternatives), Canadian Solar (Semiconductors, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Canadian Solar are a good value (attractively priced) with a consolidated Value Rank of 97 (better than 97% of alternatives) but show below-average growth (Growth Rank of 39), and are riskily financed (Safety Rank of 38), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 61, is a buy recommendation based on Canadian Solar's financial characteristics. As the company Canadian Solar's key financial metrics exhibit good value (Obermatt Value Rank of 97) but low growth (Obermatt Growth Rank of 39) and risky financing practices (Obermatt Safety Rank of 38), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 97% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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