Daqo New Energy (NYSE:DQ): Evaluating Valuation After Recent Share Price Surge

Daqo New Energy (NYSE:DQ) has recently seen its stock price move higher over the past month, giving investors a new perspective on the company’s position in the renewable energy sector. There has been increased attention on how its underlying fundamentals measure up.

See our latest analysis for Daqo New Energy.

Daqo New Energy’s share price has sprinted higher this year, with a 70.45% year-to-date gain and a 28.73% jump over the past month, as investors react to shifting sentiment around renewables. The 81.2% one-year total shareholder return signals clear momentum in spite of a challenging multi-year backdrop.

If this surge in clean energy has you curious about broader trends, it could be the perfect time to search for fast growing stocks with high insider ownership.

With Daqo New Energy’s stock on a tear, the big question now is whether shares are still undervalued or if the market is already factoring in all the company’s growth prospects. Is there a real buying opportunity here, or has optimism run ahead of fundamentals?

Most Popular Narrative: 12% Overvalued

The most closely watched narrative puts Daqo New Energy’s fair value at $30.81, notably below its last close at $34.50. This gap sets the stage for questions about whether the recent rally is sustainable, especially as the new outlook emerges in a volatile sector.

Bullish analysts have raised price targets, citing improved operating cash flow and increased polysilicon prices. These factors are expected to support stronger profit estimates.

Read the complete narrative.

Want to know what’s fueling this narrative? The story hinges on a powerful blend of expected market recovery, policy tailwinds, and surprising revenue assumptions. The numbers behind this fair value may change how you see Daqo’s prospects. Discover which projections are driving analyst conviction.

Result: Fair Value of $30.81 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent industry oversupply or prolonged margin pressure could quickly upend even the most optimistic forecasts. This keeps investors alert to near-term setbacks.

Find out about the key risks to this Daqo New Energy narrative.

Another View: Market Multiples Challenge Fair Value

Taking a look through a different lens, Daqo New Energy's price-to-sales ratio of 3.6x is solid value compared to the industry average of 5x, suggesting potential upside. However, it still trades above both its peer average of 2.4x and its fair ratio of 1.5x, highlighting possible valuation risk if investors shift their expectations. Does this signal a hidden opportunity, or could downside follow if sentiment changes?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Daqo New Energy Narrative

Feel like the current story does not capture your take, or want to dig deeper into the numbers yourself? You can quickly put together a custom narrative using your own research. It only takes a few minutes. Do it your way

A great starting point for your Daqo New Energy research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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