NEW YORK (TheStreet) -- Shares of Canadian Solar (CSIQ - Get Report) were gaining 7.6% to $22.25 on Monday after the solar module maker raised its third quarter guidance.

Canadian Solar said it expects revenue of $805 million to $815 million for the third quarter, up from its previous guidance of $570 million to $620 million for the quarter. Analysts expect the company to report earnings of $616.09 million for the third quarter.

The company also expects to ship about 1.18 GW to 1.23 GW of solar modules for the third quarter, above its previous forecast of 970 MW to 1.02 GW for the quarter.

Canadian Solar said the higher guidance reflects the higher than expected solar demand in the quarter and its sale of the 51% of the 200 MW Tranquility solar power project in California to Southern Company (SO).

The solar module company will announce its full third quarter financial results before the market opens on November 10.

"We are entering the fourth quarter of 2015 in an excellent competitive and financial position," Chairman and CEO Dr. Shawn Qu said in a statement. "We expect to see continued robust demand levels in our solar module business and we continue to execute on our already robust and steadily expanding utility-scale solar project development pipeline."

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:

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 revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins.

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

  • The revenue growth came in higher than the industry average of 13.4%. Since the same quarter one year prior, revenues slightly increased by 2.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, CANADIAN SOLAR INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 68.0% when compared to the same quarter one year ago, falling from $55.78 million to $17.86 million.
  • Currently the debt-to-equity ratio of 1.84 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. To add to this, CSIQ has a quick ratio of 0.62, 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