One-glance verdict
Within fair range
$-23.19 our estimate vs market $10.80
Wall Street consensus: $17.85 (-177.0% lower than our fair-value estimate)
147% below our estimate
Fundamentals snapshot
Canadian Solar Inc.
CSIQ · NMS · Technology · Solar
Current price
$10.80
52-week range
$10.70 - $34.59
Market cap
$733.28M
Balance sheet
Distressed
0.24x Concerning
Net debt $5.85B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Revenue grew 18.8% last year.
- Reward Free cash flow was positive in 3/10 years.
- Risk Net debt grew 106.0% over 3 years.
- Risk Operating margin compressed from 4.8% to -5.9% over 3 years.
What this company does
Canadian Solar Inc.
Canadian Solar makes and sells the equipment for solar power, like panels and large batteries, but it also builds and runs entire solar farms that sell electricity to the power grid. This means the company profits from both the one-time sale of its products and from the steady, recurring revenue (income that is regular and predictable) generated by selling electricity over the long term. This approach allows them to participate in many parts of the solar energy supply chain (the entire process of creating and distributing a product, from raw materials to the final customer).
How the company got here
Founded in Canada in 2001 by Dr. Shawn Qu, Canadian Solar started with a mission to bring solar-powered electricity to people worldwide. The company grew from a manufacturer of solar panels into a global provider of a wide range of solar energy and battery storage solutions. A key turning point was its public listing on the NASDAQ stock exchange in 2006, which provided capital (money raised to grow the business) for expansion. Another significant move was the 2015 acquisition of Recurrent Energy, a company that develops large-scale solar projects, which broadened Canadian Solar's business beyond just manufacturing.
What it actually does
Canadian Solar makes products and builds systems that capture and store energy from the sun. You can think of them as being in two main businesses: making the equipment and building the power plants. Their products include solar panels that you might see on a house or in a large field, as well as large batteries that can store solar energy for later use. They sell these products to a wide range of customers, from distributors and installers to large utility companies and businesses. The company also develops and builds entire solar power projects, from the initial design to construction and ongoing maintenance.
Manufacturing
This is the company's largest business segment, where it makes and sells solar power equipment. The main products are solar photovoltaic modules (the individual panels that collect sunlight) and battery energy storage systems that look like large containers. They also sell related parts like inverters (devices that convert solar energy into usable electricity for homes and the power grid). This division sells its products globally to distributors, project developers, and installers who then use them for everything from residential rooftops to massive utility-scale solar farms.
Recurrent Energy
This part of the company focuses on the entire lifecycle of large-scale energy projects. Instead of just selling panels, this segment develops, builds, and often operates entire solar power plants and battery storage facilities. Its customers are typically utility companies or large corporations that want to buy clean power. Recurrent Energy makes money by selling the completed projects to investors, or by operating the plants themselves and selling the electricity they generate over many years. This segment also provides long-term operations and maintenance (O&M) services for the power plants it builds and for those built by others.
What management is betting on now
The company is heavily focused on expanding its manufacturing presence in the United States. This strategy aims to build a more resilient supply chain (the network of companies involved in producing and distributing a product) and meet growing U.S. demand for domestically made clean energy products. Management is also prioritizing the growth of its energy storage business, seeing a major opportunity as the world needs ways to store solar power for when the sun isn't shining. Finally, the company is shifting its Recurrent Energy strategy from just developing and selling projects to also owning and operating more of them for long-term, stable revenue (income a company receives from its normal business activities).
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$-2.00B
FY2025 Q4
$-1.21B
Revenue
—
Net income
$-104.13M
Diluted EPS
-2.50
Operating cash flow
$-252.74M
Free cash flow
$-1.21B
Fetching…
Sources
Revenue
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Net income
$36.05M
Diluted EPS
0.54
Operating cash flow
$-885.32M
Free cash flow
$-2.00B
Fetching…
Sources
Is it cheap or expensive?
Fair value $-23.19 vs current price $10.80
Wall Street consensus is the average analyst price target: $17.85 (-177.0% lower than our fair-value estimate).
Our most-likely fair value is $-23.19 a share — about 314.7% away from today's price of $10.80, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $5.8B. Interest coverage 0.2x.
Net debt
$5.85B
Interest coverage
0.24x
Canadian Solar Inc.'s profit covers its interest bill about 0.2 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
CSIQ
BASELINE
Canadian Solar Inc.
Total debt $7.31B Interest coverage 0.24x This is the baseline the peer rows are being compared against.
Total debt $194.01M Interest coverage 36.18x +14,839% vs CSIQ Carries about 149.4x more debt cushion than CSIQ.
Total debt $6.19B Interest coverage -4.48x -100% vs CSIQ This peer has almost no interest-payment cushion compared with CSIQ.
Total debt $752.89M Interest coverage 2.70x +1,014% vs CSIQ Carries about 11.1x more debt cushion than CSIQ.
Total debt $233.81M Interest coverage 5.64x +2,229% vs CSIQ Carries about 23.3x more debt cushion than CSIQ.
What you should know
The case for and against CSIQ
2 Rewards
3 Risks
Rewards
-
Revenue grew 18.8% last year.
-
Free cash flow was positive in 3/10 years.
Risks
-
Net debt grew 106.0% over 3 years.
-
Operating margin compressed from 4.8% to -5.9% over 3 years.
-
Return on equity was -6.0% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
-2.70x
P/B
0.27x
P/S
0.15x
EV/EBITDA
12.86x
PEG ratio
0.13x
Profitability
How much profit each dollar creates
Gross margin
17.6%
Operating margin
-5.9%
Net margin
-3.7%
ROE
-6.0%
ROA
0.4%
Health
Liquidity and balance-sheet strength
Debt / equity
1.72x
Current ratio
1.02x
Quick ratio
0.43x
Total debt
$7.31B
Total cash
$1.46B
Growth
How the business has been compounding
Revenue TTM
$12.67B
Revenue 5Y CAGR
19.6%
EPS TTM
-3.84
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$463.18M
Free CF TTM
$-1.21B
FCF margin
-9.6%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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