Analyzing Canadian Solar Inc’s (NASDAQ:CSIQ) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess CSIQ’s recent performance announced on 31 December 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Canadian Solar
Could CSIQ beat the long-term trend and outperform its industry?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This enables me to examine various companies on a similar basis, using the most relevant data points. For Canadian Solar, its most recent bottom-line (trailing twelve month) is US$99.57M, which, against the prior year’s figure, has escalated by a non-trivial 52.60%. Since these values may be somewhat myopic, I’ve created an annualized five-year value for CSIQ’s net income, which stands at US$40.84M This means on average, Canadian Solar has been able to gradually grow its net income over the last couple of years as well.How has it been able to do this? Well, let’s take a look at whether it is solely because of an industry uplift, or if Canadian Solar has seen some company-specific growth. Over the last couple of years, Canadian Solar expanded its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Looking at growth from a sector-level, the US semiconductor industry has been growing its average earnings by double-digit 28.19% over the prior twelve months, and 13.91% over the past five. This suggests that any uplift the industry is benefiting from, Canadian Solar is able to leverage this to its advantage.
What does this mean?
Canadian Solar’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Canadian Solar has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Canadian Solar to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CSIQ’s future growth? Take a look at our free research report of analyst consensus for CSIQ’s outlook.
- Financial Health: Is CSIQ’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.