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Is Canadian Solar (CSIQ) Stock Undervalued Right Now?

Zacks Equity Research
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Canadian Solar (CSIQ) is a stock many investors are watching right now. CSIQ is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

Another notable valuation metric for CSIQ is its P/B ratio of 0.99. 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 1.38. Over the past 12 months, CSIQ's P/B has been as high as 1.04 and as low as 0.60, with a median of 0.78.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CSIQ has a P/S ratio of 0.34. This compares to its industry's average P/S of 0.94.

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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