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CSIQ or FSLR: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Solar sector have probably already heard of Canadian Solar (CSIQ) and First Solar (FSLR). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Canadian Solar has a Zacks Rank of #2 (Buy), while First Solar has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CSIQ is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

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Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CSIQ currently has a forward P/E ratio of 6.40, while FSLR has a forward P/E of 17.68. We also note that CSIQ has a PEG ratio of 0.20. 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. FSLR currently has a PEG ratio of 1.60.

Another notable valuation metric for CSIQ is its P/B ratio of 0.73. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FSLR has a P/B of 0.98.

Based on these metrics and many more, CSIQ holds a Value grade of A, while FSLR has a Value grade of D.

CSIQ stands above FSLR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CSIQ is the superior value option right now.


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Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
 
First Solar, Inc. (FSLR) : Free Stock Analysis Report
 
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Zacks Investment Research