Does JinkoSolar’s Recent 32% Rally Signal a New Opportunity in 2025?

• Curious if JinkoSolar Holding is undervalued right now? You are not alone, as many investors are looking for that edge in a volatile solar market.
• JinkoSolar’s stock has climbed 3.1% over the past week and increased 32.3% in the last month, pushing its year-to-date gain to 17.6% and 53.5% over the past year.
• Driving these swings, recent headlines have highlighted the company’s continued expansion into new international markets and its advancements in ultra-efficient solar module technology. This context matters because it signals confidence in future growth, which the market is watching closely.
• With a valuation score of 5/6 on our quick checks, JinkoSolar is acing most of the basic undervaluation tests. But is that enough? We will break down the classic valuation approaches and, later in the article, show you a smarter way to judge whether the market’s got this one right.

JinkoSolar Holding delivered 53.5% returns over the last year. See how this stacks up to the rest of the Semiconductor industry.

Approach 1: JinkoSolar Holding Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and discounting them back to today's value, reflecting the time value of money. For JinkoSolar Holding, this approach centers around the company's Free Cash Flow (FCF), which represents the cash it can generate after accounting for capital expenditures.

Currently, JinkoSolar generates trailing twelve-month Free Cash Flow of approximately CN¥5.04 billion. Despite a recent dip forecasted for 2024, analysts and sector models expect annual FCF growth to accelerate in the years ahead. By 2035, projections extrapolated by Simply Wall St push JinkoSolar's FCF up to an estimated CN¥9.68 billion. These forecasts are based on a staged growth rate, with growth expected to slow somewhat over time but still deliver steady expansion.

Using these cash flow projections, the model calculates an estimated intrinsic share value of $178.56. In comparison to the current share price, this suggests the stock is trading at an 82.9% discount to its DCF-derived value, indicating substantial undervaluation at current levels.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests JinkoSolar Holding is undervalued by 82.9%. Track this in your watchlist or portfolio, or discover 894 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for JinkoSolar Holding.

Approach 2: JinkoSolar Holding Price vs Sales

The Price-to-Sales (PS) ratio is a practical valuation tool for assessing companies like JinkoSolar Holding, especially in sectors where profitability can fluctuate due to factors like heavy reinvestment or market cycles. The PS ratio is valued for its simplicity and for the fact that sales tend to be more stable and less prone to accounting nuances than earnings. This makes it a solid yardstick for high-growth or capital-intensive businesses.

When it comes to valuation, the PS ratio's “normal” or “fair” level depends heavily on expectations for future growth and business risk. High-growth companies or those operating in less risky environments often warrant a higher PS multiple. In contrast, slower-growth or riskier businesses tend to trade at lower ratios.

JinkoSolar currently trades at a strikingly low PS ratio of 0.14x, which is far below both the industry average of 4.75x and the semiconductor peer group average of 9.45x. This deep discount may catch the eye, but a simple peer comparison does not capture the full story. Simply Wall St's proprietary Fair Ratio addresses this by taking into account JinkoSolar's growth profile, margins, scale, risk factors, and its unique industry position. This analysis arrives at a Fair PS Ratio of 1.86x.

Unlike straightforward benchmarks, the Fair Ratio is tailored to JinkoSolar’s individual circumstances and offers a truer sense of what the market should pay. By comparing the Fair Ratio to the current PS multiple, it appears that the stock is significantly undervalued on this basis.

Result: UNDERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1417 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your JinkoSolar Holding Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple way for you to attach your story or viewpoint to a company, turning numbers like fair value, future revenue, earnings, and margins into a personalized investment thesis. Narratives connect the dots between the company’s real-world story, your financial forecasts, and what you believe its fair value should be.

On Simply Wall St’s Community page, millions of investors use Narratives as an accessible tool to build and share their perspectives. Narratives empower you to decide whether to buy or sell by comparing your Fair Value estimate to the current market price, letting you act on a strategy rooted in your own analysis and insights. The best part is that Narratives automatically update when new news or earnings are released, so your investment thesis evolves in real time.

For JinkoSolar Holding, for example, some investors may see long-term potential in the company’s technology and international expansion and set a Fair Value as high as $66.10, while more cautious investors, wary of policy risks or industry competition, might see a conservative Fair Value closer to $17. Both Narratives reflect different stories about what’s next and which price makes sense for them.

Do you think there's more to the story for JinkoSolar Holding? Head over to our Community to see what others are saying!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com