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

Zacks Equity Research
·2 min read

Investors with an interest in Solar stocks have likely encountered both Canadian Solar (CSIQ) and Enphase Energy (ENPH). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Canadian Solar and Enphase Energy are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. 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. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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 15.16, while ENPH has a forward P/E of 92.08. We also note that CSIQ has a PEG ratio of 0.47. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ENPH currently has a PEG ratio of 2.64.

Another notable valuation metric for CSIQ is its P/B ratio of 1.51. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ENPH has a P/B of 35.58.

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

CSIQ is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CSIQ is likely 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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