President Biden is going all-in on solar. Yesterday, the Biden administration released its blueprint mapping out how the U.S. could produce 45% of its electricity using solar power by 2050. The plan indicates that the U.S. would have to double the amount of solar energy produced each year over the next four years and then double it again by 2030 — it’s an ambitious but not unreachable goal.
In order to reach its goal, significant upgrades to solar infrastructure will be necessary, and solar companies are set to benefit from potential additional solar spending. In today’s trade alert, we’ll focus on one of the most bankable companies in the solar and renewable energy industry.
Founded in 2001, Canadian Solar Inc. (CSIQ) is a leading manufacturer of solar photovoltaic modules and a provider of solar energy solutions. The company operates primarily through two segments — Energy and Module and system solutions (MSS). CSIQ has delivered roughly 52 GW of solar modules to thousands of customers in more than 150 countries through the end of 2020, reaching roughly 13 million households. Canadian Solar derives roughly 47% of its revenue from Asia, 35% from the Americas, and 18% from Europe and everywhere else.
The company has been growing its revenue steadily over the years. In the second quarter, its revenue grew 105% over the pandemic-affected Q2 last year.
The company’s net revenue has grown at a CAGR of 4.4% over the past three years, while its EBITDA increased at a CAGR of 40.5% over the same period. Also, its EPS has increased at a CAGR of 112.5% over the past three years. CSIQ had generated a 30% growth in shipments since 2013 and has generated nearly $1.4 billion in cash since 2013.
Canadian Solar is one of the most bankable companies in the solar and renewable energy industry, having been publicly listed on the NASDAQ since 2006. The company has the potential to advance in the upcoming months based on its continued business growth, favorable earnings, and revenue outlook.
CSIQ has an impressive earnings surprise history, with the company beating consensus EPS estimates in each of the trailing four quarters. Its EPS is expected to grow at a rate of 20% per annum over the next five years.
The 6 analysts offering 12-month price forecasts for Canadian Solar Inc have a median target of 51.50, representing a 41.48% increase from its last price. The current consensus among 7 polled investment analysts is to Hold CSIQ. There are 3 Buy ratings for the stock, 4 Hold ratings, and no Sell ratings for the stock.
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