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CSIQ vs. ENPH: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors looking for stocks in the Solar sector might want to consider either Canadian Solar (CSIQ) or Enphase Energy (ENPH). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Canadian Solar has a Zacks Rank of #2 (Buy), while Enphase Energy has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CSIQ 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

CSIQ currently has a forward P/E ratio of 16.01, while ENPH has a forward P/E of 93.54. We also note that CSIQ has a PEG ratio of 0.50. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ENPH currently has a PEG ratio of 3.27.

Another notable valuation metric for CSIQ is its P/B ratio of 1.60. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ENPH has a P/B of 37.17.

These are just a few of the metrics contributing to CSIQ's Value grade of A and ENPH's Value grade of F.

CSIQ stands above ENPH thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CSIQ is the superior value option right now.


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Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
 
Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report
 
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Zacks Investment Research