Why JinkoSolar (JKS) Is Falling Today

NEW YORK (TheStreet) -- JinkoSolar (JKS) was falling 5.8% to $30.83 despite beating analysts' expectations in the fourth quarter as investors are worried about a Russian invasion of Ukraine.

The solar energy company posted earnings of $1.28 a share, beating the Capital IQ Consensus of 93 cents a share by 35 cents. Revenue rose 87.5% to $361 million in the quarter. Analysts estimated revenue of $346.8 million for the quarter.

JinkoSolar said it expects shipments of solar models to be between 440 MW and 470 MW in the first quarter. The company expects to ship between 2.3 GW and 2.5 GW of solar modules in full-year 2014, with total project development scale expected to be above 400 MW.

Must read: Going Solar

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TheStreet Ratings team rates JINKOSOLAR HOLDING CO as a "sell" with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate JINKOSOLAR HOLDING CO (JKS) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is very high at 3.00 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. To add to this, JKS has a quick ratio of 0.54, this demonstrates the lack of ability of the company to cover short-term liquidity needs.
  • The gross profit margin for JINKOSOLAR HOLDING CO is rather low; currently it is at 22.27%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, JKS's net profit margin of 5.24% is significantly lower than the industry average.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, JINKOSOLAR HOLDING CO's return on equity significantly trails that of both the industry average and the S&P 500.
  • JINKOSOLAR HOLDING CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, JINKOSOLAR HOLDING CO swung to a loss, reporting -$11.15 versus $1.39 in the prior year. This year, the market expects an improvement in earnings ($0.30 versus -$11.15).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 271.3% when compared to the same quarter one year prior, rising from -$9.85 million to $16.88 million.
  • You can view the full analysis from the report here: JKS Ratings Report

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