On Thursday, Canadian Solar Inc. (NASDAQ:CSIQ) shares edged higher by 3.5% after reporting its most recent quarterly results. The company released its fiscal third-quarter results before the US markets opened, beating analyst expectations on earnings. However, its FQ3 revenue missed expectations, while its FQ4 guidance fell short of the consensus Street forecast.
Canadian Solar reported FQ3 non-GAAP earnings per share of $0.42, smashing the consensus for Street estimates of $0.13. On the other hand, its GAAP EPS of $0.52 beat the average for analyst estimates of $0.30, while revenue for the quarter increased by 34.5% from the same quarter a year ago to $1.23 billion, missing expectations by $110 million.
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Canadian Solar also issued fiscal-fourth quarter revenue guidance in the range of $1.5 billion to $1.6 billion, falling short of the consensus Street estimate of $1.79 billion.
Canadian Solar looks undervalued
From an investment perspective, Canadian Solar shares trade at an attractive forward P/E ratio of about 12.57, making the stock a compelling option for value investors.
In addition, although analysts predict its earnings to decline by more than 16% this year, they also expect a spike of more than 129% next year. Therefore, Canadian Solar shares could also gain the attention of growth investors.
The stock has plunged more than 24% this year, thus creating a perfect entry opportunity.
Technically, Canadian Solar shares seem to be trading within a descending channel formation in the intraday chart. However, the stock recently bounced off the trendline support to surge above the trendline resistance, creating an opportunity for a technical pullback.
Therefore, investors could target potential pullback profits at about $38.04, or lower at $35.88, while $41.87 and $44.02 are crucial resistance levels.
It could be time to take some profits
In summary, although Canadian Solar shares trade at exciting valuation multiples, the stock appears to have recently spiked to trade above the 100-day moving average.
Therefore, although it is yet to reach overbought conditions, we could witness a short-term pullback.
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