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Canadian Solar (CSIQ) Up 11.8% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Canadian Solar (CSIQ - Free Report) . Shares have added about 11.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Canadian Solar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Canadian Solar (CSIQ - Free Report) Q3 Earnings Miss, Revenues Fall Y/Y
Canadian Solar reported third-quarter 2023 earnings of 32 cents per share, lagging the Zacks Consensus Estimate of 91 cents by 64.8%. The bottom line also declined 71.4% from the third-quarter 2022 reported figure.
Total Revenues
This solar cell manufacturer’s total revenues of $1,846.3 million lagged the Zacks Consensus Estimate of $1,994 million by 7.4%. The top line also decreased 4% from the $1,932.5 million reported in the third quarter of 2022.
Operational Update
Solar module shipments in the quarter totaled 8.3 gigawatts (GW), below the guidance range of 8.5-8.7 GW. This includes 82 megawatts (MW) of the company's utility-scale solar power projects. Total module shipments increased 39% on a year-over-year basis.
Canadian Solar’s gross margin was 16.7% in the quarter, below the guided range of 17.5-19.5%. Total operating expenses were $225 million, down 17.9% year over year.
Depreciation and amortization charges were $76 million, up from the $56 million recorded in the year-ago period.
Financial Update
As of Sep 30, 2023, Canadian Solar’s cash and cash equivalents totaled $1,921.1 million, up from $981.4 million on Dec 31, 2022.
Long-term borrowings as of Sep 30, 2023 were $1,071.8 million, up from $813.4 million on Dec 31, 2022.
Guidance
For the fourth quarter of 2023, Canadian Solar expects total module shipments in the range of 7.6-8.1 GW, including approximately 95 MW of module shipments for its projects. Total revenues are expected in the range of $1.6-$1.8 billion. The Zacks Consensus Estimate for fourth-quarter sales is pegged at $2.58 billion, higher than the midpoint of the company’s guided range. The gross margin is expected between 14% and 16%.
Total battery energy storage shipments by CSI Solar in the fourth quarter are expected between 1.4 gigawatt-hours (GWh) and 1.5 GWh.
For 2023, total module shipments are expected between 42 and 47 GW. Battery storage shipments are expected in the range of 6 GWh-6.5 GWh.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -106.81% due to these changes.
VGM Scores
Currently, Canadian Solar has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Canadian Solar has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Canadian Solar belongs to the Zacks Solar industry. Another stock from the same industry, Array Technologies, Inc. (ARRY - Free Report) , has gained 18.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Array Technologies, Inc. reported revenues of $350.44 million in the last reported quarter, representing a year-over-year change of -32%. EPS of $0.21 for the same period compares with $0.18 a year ago.
Array Technologies, Inc. is expected to post earnings of $0.12 per share for the current quarter, representing a year-over-year change of +20%. Over the last 30 days, the Zacks Consensus Estimate has changed -7.1%.
Array Technologies, Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Canadian Solar (CSIQ) Up 11.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Canadian Solar (CSIQ - Free Report) . Shares have added about 11.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Canadian Solar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Canadian Solar (CSIQ - Free Report) Q3 Earnings Miss, Revenues Fall Y/Y
Canadian Solar reported third-quarter 2023 earnings of 32 cents per share, lagging the Zacks Consensus Estimate of 91 cents by 64.8%. The bottom line also declined 71.4% from the third-quarter 2022 reported figure.
Total Revenues
This solar cell manufacturer’s total revenues of $1,846.3 million lagged the Zacks Consensus Estimate of $1,994 million by 7.4%. The top line also decreased 4% from the $1,932.5 million reported in the third quarter of 2022.
Operational Update
Solar module shipments in the quarter totaled 8.3 gigawatts (GW), below the guidance range of 8.5-8.7 GW. This includes 82 megawatts (MW) of the company's utility-scale solar power projects. Total module shipments increased 39% on a year-over-year basis.
Canadian Solar’s gross margin was 16.7% in the quarter, below the guided range of 17.5-19.5%. Total operating expenses were $225 million, down 17.9% year over year.
Depreciation and amortization charges were $76 million, up from the $56 million recorded in the year-ago period.
Financial Update
As of Sep 30, 2023, Canadian Solar’s cash and cash equivalents totaled $1,921.1 million, up from $981.4 million on Dec 31, 2022.
Long-term borrowings as of Sep 30, 2023 were $1,071.8 million, up from $813.4 million on Dec 31, 2022.
Guidance
For the fourth quarter of 2023, Canadian Solar expects total module shipments in the range of 7.6-8.1 GW, including approximately 95 MW of module shipments for its projects. Total revenues are expected in the range of $1.6-$1.8 billion. The Zacks Consensus Estimate for fourth-quarter sales is pegged at $2.58 billion, higher than the midpoint of the company’s guided range. The gross margin is expected between 14% and 16%.
Total battery energy storage shipments by CSI Solar in the fourth quarter are expected between 1.4 gigawatt-hours (GWh) and 1.5 GWh.
For 2023, total module shipments are expected between 42 and 47 GW. Battery storage shipments are expected in the range of 6 GWh-6.5 GWh.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -106.81% due to these changes.
VGM Scores
Currently, Canadian Solar has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Canadian Solar has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Canadian Solar belongs to the Zacks Solar industry. Another stock from the same industry, Array Technologies, Inc. (ARRY - Free Report) , has gained 18.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2023.
Array Technologies, Inc. reported revenues of $350.44 million in the last reported quarter, representing a year-over-year change of -32%. EPS of $0.21 for the same period compares with $0.18 a year ago.
Array Technologies, Inc. is expected to post earnings of $0.12 per share for the current quarter, representing a year-over-year change of +20%. Over the last 30 days, the Zacks Consensus Estimate has changed -7.1%.
Array Technologies, Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.