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JKS vs. SUNW: Which Stock Is the Better Value Option?

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Investors with an interest in Solar stocks have likely encountered both JinkoSolar (JKS - Free Report) and Sunworks, Inc. . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

JinkoSolar has a Zacks Rank of #1 (Strong Buy), while Sunworks, Inc. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that JKS has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

JKS currently has a forward P/E ratio of 6.19, while SUNW has a forward P/E of 21.82. We also note that JKS has a PEG ratio of 0.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SUNW currently has a PEG ratio of 2.18.

Another notable valuation metric for JKS is its P/B ratio of 0.44. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SUNW has a P/B of 1.20.

Based on these metrics and many more, JKS holds a Value grade of B, while SUNW has a Value grade of D.

JKS has seen stronger estimate revision activity and sports more attractive valuation metrics than SUNW, so it seems like value investors will conclude that JKS is the superior option right now.


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