Canadian Solar Inc. (NASDAQ: CSIQ) Earnings Report Analysis

Canadian Solar (NASDAQ:CSIQ) delivered a mixed fourth-quarter report, with revenue surpassing expectations but earnings coming in well below forecasts, and issued a cautious outlook for 2025. Despite the miss, shares rose more than 3% intra-day today.

The company reported Q4 revenue of $1.67 billion, edging past the $1.64 billion estimate, but posted a sharper-than-expected adjusted loss of $1.47 per share, compared to analysts' forecast of just a $0.03 loss.

The earnings miss was attributed to impairment charges related to solar and manufacturing assets, along with the impact of tariffs and anti-dumping duties. Revenue also fell 11% year-over-year, driven by declining average selling prices for solar modules.

Looking ahead, Canadian Solar expects Q1 2025 revenue between $1.0 billion and $1.2 billion, well below the $1.62 billion consensus estimate. For the full year, the company projected revenue in the range of $7.3 billion to $8.3 billion, compared to the consensus of $7.46 billion.

• Canadian Solar Inc. (NASDAQ:CSIQ) is set to release its quarterly earnings with an anticipated improvement in EPS from the previous year.
• The company's financial metrics present a mixed picture, with a high P/E ratio but a low price-to-sales ratio.
• Despite a recent decline in share price, Canadian Solar secures significant agreements for battery energy storage projects in the U.S.

Canadian Solar Inc. (NASDAQ:CSIQ) is a prominent player in the solar energy sector, known for its solar photovoltaic modules and energy storage solutions. The company operates globally, with a strong presence in both the manufacturing and project development segments. It faces competition from other solar companies like First Solar and SunPower.

On March 25, 2025, CSIQ is set to release its quarterly earnings. Wall Street estimates the earnings per share to be -$0.21, while analysts anticipate a more optimistic figure of $0.11 per share. This would mark a significant improvement from the previous year's loss of $0.02 per share. The revenue is projected to be approximately $1.57 billion, slightly down from $1.7 billion in the same period last year.

Despite the positive outlook on earnings, Canadian Solar's shares recently experienced a decline of 1.9%, closing at $9.96. This drop comes amid the company's announcement of securing Battery Supply Agreements and Long-Term Service Agreements for two major battery energy storage projects in the United States, developed by Aypa Power.

Canadian Solar's financial metrics reveal a mixed picture. The company has a high price-to-earnings (P/E) ratio of 576.25, indicating a high valuation relative to its earnings. However, its price-to-sales ratio is 0.10, suggesting that the market values its sales at a relatively low level. The enterprise value to sales ratio is 0.72, while the enterprise value to operating cash flow ratio is negative at -5.84, indicating potential challenges in cash flow generation.

The company's earnings yield is 0.17%, reflecting a low return on investment relative to its share price. With a debt-to-equity ratio of 2.08, Canadian Solar Inc. has a significant level of debt compared to its equity. The current ratio is 1.06, suggesting that the company has a slightly higher level of current assets compared to its current liabilities, indicating a modest level of short-term financial health.

Canadian Solar (NASDAQ:CSIQ) saw its shares fall around 5% in pre-market trading on Thursday following a wider-than-expected third-quarter loss and a subdued outlook for the fourth quarter.

The company reported a loss of $0.21 per share for the third quarter, missing analyst expectations of a $0.11 loss. Revenue declined 18% year-over-year to $1.51 billion, falling short of the $1.71 billion consensus estimate.

Looking ahead, Canadian Solar projected fourth-quarter revenue between $1.5 billion and $1.7 billion, significantly below Wall Street’s estimate of $2.15 billion. The company attributed the weak guidance to persistent challenges in the solar industry, including external pressures and internal complexities.

Despite these setbacks, Canadian Solar achieved a milestone by growing its energy storage contracted backlog to a record $3.2 billion as of November 30. Additionally, the company finalized a $500 million investment from BlackRock into its Recurrent Energy subsidiary during the quarter, bolstering its financial position.

While Canadian Solar continues to navigate a difficult operating environment, its expanding energy storage business and strategic investments could provide long-term growth opportunities amidst industry headwinds.

Canadian Solar Inc. (NASDAQ:CSIQ) shares dropped more than 4% today following the company’s reported Q1 results, with EPS of $0.14 coming in better than the consensus estimate of ($0.13). Revenue was $1.25 billion, compared to the consensus estimate of $1.31 billion.

The company announced plans to increase vertical integration as it continues to see demand growing. Management estimates that global solar demand will double from 2019 levels in 2022, reaching 200GW.

With its target of 15% market share, analysts at Oppenheimer believe the company is prudent to actively manage its cost structure and control additional elements of its supply chain. The analysts mentioned they are encouraged by energy storage project pipeline growth as they expect storage to prove a meaningful earnings contributor going forward, particularly in Latin America, where they expect grid stability services to be at a premium.

The company also provided guidance for Q2 well ahead of Street expectations. Quarterly revenue is expected to range from $2.2 billion to $2.3 billion.