NEW YORK (TheStreet) -- Canadian Solar (CSIQ - Get Report) was gaining 7.5% to $29.11 after being award a supply agreement to supply 43MW of photovoltaic modules for the second largest solar power plant project in Japan.
The company will supply about 168,300 pieces of its 60 cell high efficiency modules for the project. Canadian Solar expects to start shipping the PV modules in May, with shipments expected to be complete in February 2015.
TheStreet Ratings team rates CANADIAN SOLAR INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
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"We rate CANADIAN SOLAR INC (CSIQ) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CSIQ's very impressive revenue growth greatly exceeded the industry average of 1.5%. Since the same quarter one year prior, revenues leaped by 76.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- CANADIAN SOLAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, CANADIAN SOLAR INC turned its bottom line around by earning $0.56 versus -$4.52 in the prior year. This year, the market expects an improvement in earnings ($3.72 versus $0.56).
- The gross profit margin for CANADIAN SOLAR INC is rather low; currently it is at 19.49%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, CSIQ's net profit margin of 4.03% is significantly lower than the industry average.
- The debt-to-equity ratio is very high at 2.32 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, CSIQ has a quick ratio of 0.56, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
- You can view the full analysis from the report here: CSIQ Ratings Report