Entering text into the input field will update the search result below

Canadian Solar: Strong Growth Prospects With A Low Valuation

Jun. 06, 2023 9:06 AM ETCanadian Solar Inc. (CSIQ)18 Comments


  • Canadian Solar is a profitable and growing solar energy solutions provider with a low forward price-to-earnings ratio of 7.29.
  • The company has strong growth prospects in both solar module manufacturing and utility-scale solar power projects, with a target to increase global market share from 9% to 13-15% in the next 3-5 years.
  • Key risks include reliance on government subsidies and competition from other solar companies, but these are considered minimal for Canadian Solar, leading to a buy rating.

Solar power farm in the evening.

Pavel Babic


Canadian Solar (NASDAQ:CSIQ) is a profitable and growing company that primarily focuses on the solar market. Over the past 5 years shares are up 118%, with 18% growth in the past year. Despite this growth, it still trades on a

This article was written by

I am a small investor who only manages my personal portfolio. I focus on finding overlooked value stocks and only buy at the right price. I contribute to seeking alpha as a hobby, and to share and discuss ideas.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (18)

The CSI component was IPOed on the Shanghai stock exchange on Jun 9th. The mother company retained some 60% of the shares. Even so I cannot see why and how existing shareholders were not compensated for this operation. I asked investor relations but they did not answer. Might you know?
Fantasee_Investor profile picture
Down at $36.00 or so on this press release!
Makes no sense... Buying.
Whognu53 profile picture
Any comment on the move onto the Shanghai market and it's effect on the nasdaq market shares?
When I read these reports no one makes a forward EPS estimate.
CSIQ EPS estimates keep rising. Probably in 2023 EPS could be $7.00 and in 2024 EPS could be $10. 2025? 10x$10=$100.
engineeringeddie profile picture
@solarstorage poly and wafer input costs have cratered and the top tier panel prices (TOPCon, HJT topologies) are holding near steady. Margins are getting fat again for downstream premium manufacturers. The more n-type panels a company produces the bigger the windfall is going to be. I expect Jinko’s FWD EPS to be at least double the current estimate. CSIQ should see similar benefits.
Do you know of anybody who has modeled impact of changes in module price per Watt on overall LCOE of utility-scale solar?

For example, how much each cent/watt change in panel price changes end equation? How many watt/hours per watt are to be expected on average from a panel over its lifetime?

With declining costs across the mfg chain, I would think that the cost superiority of utility scale solar must be getting pretty extreme - without obviously negative impacts on margins, apart from polysilicon mfgs.
Informative article, but my question to you @@Mountain Valley Value Investments is what makes you think the market will all of a sudden finally give it its much deserved multiple expansion ? I’ve owned this stock for 4 years, and despite earnings growing substantially, it hasn’t done anything.

Besides the China connection, is there any other reason you can discern as to why this stock trades so cheaply?
Mountain Valley Value Investments profile picture
@Firebelly, One reason may be its debt load, with a net debt of $3 billion, while competitors such as First Solar are debt free. A large part of this debt has been taken on to expand manufacturing capacity, and as this capacity comes online should generate cash flow to help pay down this debt.

As debt gets paid down and cash flows increase, this should hopefully act as a catalyst to help with multiple expansion.
@Mountain Valley Value Investments
Net debt in 1Q23 earnings stated as $2.151 bn.

Net debt/EBITDA ratio is below 3.

CAPEX/revenue ratio also holding pretty steady.


Slide 14
@Mountain Valley Value Investments Book value and shareholder equity are going up every quarter. It's not like they're buying legos with their profits.
Karl Glazier profile picture
The Chinese management gives itself stock based compensation of $10 -20 mill a year, and now that their CSI Solar subsidiary has gone public in China, they give themselves a bonus of $50 mill., all out of shareholder's pockets.
Timothy J Hayden profile picture
@Karl Glazier add in allegations of ‘slave labour’ in China and tariff dodging and you find there is very little that is ‘Canadian’ about this operation.
@Karl Glazier can you link a source to this comment about it coming out of shareholder’s profits and this news in general?
Excellent points throughout.

However, I would beg to differ regarding dependence on government subsidies.

This fundamentally ignores the transformation of the solar (and wind) industries, due to the cost superiority of UNSUBSIDIZED utility scale solar. There is simply no cheaper option for establishing new utility scale capacity.

The true bottleneck for solar lies in permitting and regulation. Although the US has taken some steps to improve the efficiency of permitting and interconnection, it is still an inefficient system run by a tapestry of utility fifedoms.

Where utility infrastructure is more coordinated at the national and international level (EU, China), the rates of adoption are rising much faster than in the US.

However, subsidies in the US are now more attractive than anywhere else, so there is a natural focus on the US market, even though it comprises only a small fraction of the total global market. Obviously, even though solar is the most attractive option without subsidies, it becomes EVEN MORE attractive with subsidies. Take away the subsidies and solar still has the competitive advantage in terms of cost.

Given the fact that cheap energy equals competitive industry, we will likely see an increasing rush to adopt ahead of others. Especially once the rest of the world realizes just how rapidly China is upscaling its renewable energy capacity and grid infrastructure (HVDC).

In any case, the cheapest energy always wins, and CSIQ has proven to be one of the most adept companies at operating profitably in this capital-intensive manufacturing industry.

Definitely one of my best bets.

Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.