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Jinko Solar Holdings (JKS - Free Report) who currently holds a Zacks Rank #5 (Strong Sell) is a solar product manufacturer with operations based in Jiangxi Province and Zhejiang Province in China. JinkoSolar has built a vertically integrated solar product value chain from recovered silicon materials to solar modules. JinkoSolar's principal products are silicon wafers, solar cells and solar modules which are all along the photovoltaic value chain, with a global network spanning across Europe, North America and Asia.
Recent Earnings Results
In early September, JKS reported Q2 earnings where they significantly missed the Zacks consensus earnings estimate ($0.20 actual vs. $0.69 expected), but did beat the Zacks consensus revenue estimate.
Factors for the Decline
While the company posted strong revenue growth (+37.2% sequentially) in their Q2 17 earnings report, issues of increased supply chain pricing negatively impacting their cost structure. Further, these costs look like they are going to continue to increase into 2018. Lastly, the increased pricing coupled with more shipments from lower margin products caused gross margins to come in below expectations.
Management’s Take
According to Mr. Kangping Chen, CEO, “Shipments over the past few quarters have surged to new highs, allowing us to continuously capitalize on the growing recognition of JinkoSolar's brand and excellent products and services to increase our market share. While ASPs declined during the quarter, prices along our supply chain remained relatively high and impacting our margins. We also worked with our OEM partners more extensively than expected during the quarter to ensure timely delivery, which adversely impacted our margins. We are currently reviewing our strategy in order to improve profitability and further cut down the use of OEM going forward. Our efforts will also be focused on strengthening inventory management and controlling operating expenses.”
Price and Earnings Consensus Graph
As you can see in the graph below the stock price had a nice run, but higher than expected supply chain pricing, and lower gross margins have caused the stock price to recede and for future earnings estimates to decline as of late.
JinkoSolar Holding Company Limited Price and Consensus
Due to the headwinds facing the company in the second half of their fiscal year, earnings estimates for Q3 17, Q4 17, FY 17 and FY 18 earnings estimates have declined over the past 30days; Q3 17 dropped from $0.41 to $0.17, Q4 17 plummeted from $0.63 to $0.12, FY 17 fell from $1.99 to $0.77, and FY 18 was more than cut in half from $2.20 to $0.99.
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Bear of the Day: JinkoSolar Holdings (JKS)
Jinko Solar Holdings (JKS - Free Report) who currently holds a Zacks Rank #5 (Strong Sell) is a solar product manufacturer with operations based in Jiangxi Province and Zhejiang Province in China. JinkoSolar has built a vertically integrated solar product value chain from recovered silicon materials to solar modules. JinkoSolar's principal products are silicon wafers, solar cells and solar modules which are all along the photovoltaic value chain, with a global network spanning across Europe, North America and Asia.
Recent Earnings Results
In early September, JKS reported Q2 earnings where they significantly missed the Zacks consensus earnings estimate ($0.20 actual vs. $0.69 expected), but did beat the Zacks consensus revenue estimate.
Factors for the Decline
While the company posted strong revenue growth (+37.2% sequentially) in their Q2 17 earnings report, issues of increased supply chain pricing negatively impacting their cost structure. Further, these costs look like they are going to continue to increase into 2018. Lastly, the increased pricing coupled with more shipments from lower margin products caused gross margins to come in below expectations.
Management’s Take
According to Mr. Kangping Chen, CEO, “Shipments over the past few quarters have surged to new highs, allowing us to continuously capitalize on the growing recognition of JinkoSolar's brand and excellent products and services to increase our market share. While ASPs declined during the quarter, prices along our supply chain remained relatively high and impacting our margins. We also worked with our OEM partners more extensively than expected during the quarter to ensure timely delivery, which adversely impacted our margins. We are currently reviewing our strategy in order to improve profitability and further cut down the use of OEM going forward. Our efforts will also be focused on strengthening inventory management and controlling operating expenses.”
Price and Earnings Consensus Graph
As you can see in the graph below the stock price had a nice run, but higher than expected supply chain pricing, and lower gross margins have caused the stock price to recede and for future earnings estimates to decline as of late.
JinkoSolar Holding Company Limited Price and Consensus
JinkoSolar Holding Company Limited Price and Consensus | JinkoSolar Holding Company Limited Quote
Decreasing Future Earnings Estimates
Due to the headwinds facing the company in the second half of their fiscal year, earnings estimates for Q3 17, Q4 17, FY 17 and FY 18 earnings estimates have declined over the past 30days; Q3 17 dropped from $0.41 to $0.17, Q4 17 plummeted from $0.63 to $0.12, FY 17 fell from $1.99 to $0.77, and FY 18 was more than cut in half from $2.20 to $0.99.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation. See Them Free>>