Canadian Solar Inc. Just Missed EPS By 93%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Canadian Solar Inc. (NASDAQ:CSIQ), given that the company fell short of expectations when it released its quarterly results last week. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of US$1.7b missed by 11%, and statutory earnings per share of US$0.11 fell short of forecasts by 93%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, Canadian Solar's ten analysts currently expect revenues in 2025 to be US$5.97b, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 1,590% (on a statutory basis) to US$1.74. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$6.26b and earnings per share (EPS) of US$0.37 in 2025. There looks to have been a significant drop in sentiment regarding Canadian Solar's prospects after these latest results, with a minor downgrade to revenues and the analysts now forecasting a loss instead of a profit.

Check out our latest analysis for Canadian Solar

The average price target was broadly unchanged at US$12.67, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Canadian Solar, with the most bullish analyst valuing it at US$21.00 and the most bearish at US$7.00 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Canadian Solar's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.8% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Canadian Solar.

The Bottom Line

The biggest low-light for us was that the forecasts for Canadian Solar dropped from profits to a loss next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$12.67, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Canadian Solar. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Canadian Solar going out to 2027, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Canadian Solar that you need to take into consideration.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.