ReneSola Stock: Metrics Paint Grim Picture

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Stock Markets29 minutes agone (Sep 15, 2021 03:31PM ET)

 Metrics Paint Grim Picture © Reuters. ReneSola Stock: Metrics Paint Grim Picture

ReneSola Ltd. (SOL) designs, builds, operates and sells star powerfulness projects successful the United States and Europe.

I americium bearish connected the stock. (See SOL banal charts connected TipRanks)

The PolySilicon Crisis

After falling rapidly for implicit a decade, Solar module prices person taken an upturn for the worse successful 2021.

The catalyst for the higher outgo of accumulation is the shortage of polysilicon. This was initially caused by pandemic proviso concatenation disruptions, and subsequently amplified by panic buying, arsenic manufacturers' fearfulness of implied ostentation intensified.

Renesola has decidedly felt macro-economic factors arsenic it precocious missed its Q2 gross estimation by $2.22 million, and reduced its archetypal Q3 gross guidance to $19 cardinal to $21 million, from its erstwhile estimation of $26 million.

Valuation Metrics

From a valuation vantage point, the stock's terms is inflated. Relative to the sector, its EV/EBITDA (50.9) is overvalued by 258.9%, and its price-to-sales (5.2) is overvalued by 228.2%.

A PEG ratio of 29.6, and a guardant PEG of 31.4, means immoderate statement for hypergrowth would beryllium invalid.

Ideally, you'd similar your PEG to beryllium astatine oregon beneath 1.0, arsenic this indicates that the company's maturation justifies the terms that the stock's trading at.

Wall Street's Take

Wall Street thinks the banal is simply a Moderate Buy, with 2 Buys, and 1 Sell assigned successful the past 3 months. The mean SOL terms people of $11.35 implies 58.7% upside potential.

Most analysts spot the PolySilicon situation arsenic transitory and deliberation that the U.S. infrastructure measure and net-zero emissions propulsion volition enactment ReneSola.

On the different hand, the renewable vigor abstraction is becoming progressively competitive. Stocks won't simply bash good due to the fact that of an manufacture trend, and they request to warrant show with high-quality pricing and valuation numbers, which ReneSola doesn't person astatine the moment.

Disclosure: At the clip of publication, Steve Gray Booyens did not person a presumption successful immoderate of the securities mentioned successful this article.

Disclaimer: The accusation contained successful this nonfiction represents the views and sentiment of the writer only, and not the views oregon sentiment of TipRanks oregon its affiliates, and should beryllium considered for informational purposes only. TipRanks makes nary warranties astir the completeness, accuracy oregon reliability of specified information. Nothing successful this nonfiction should beryllium taken arsenic a proposal oregon solicitation to acquisition oregon merchantability securities. Nothing successful the nonfiction constitutes legal, professional, concern and/or fiscal proposal and/or takes into relationship the circumstantial needs and/or requirements of an individual, nor does immoderate accusation successful the nonfiction represent a broad oregon implicit connection of the matters oregon taxable discussed therein. TipRanks and its affiliates disclaim each liability oregon work with respect to the contented of the article, and immoderate enactment taken upon the accusation successful the nonfiction is astatine your ain and sole risk. The nexus to this nonfiction does not represent an endorsement oregon proposal by TipRanks oregon its affiliates. Past show is not indicative of aboriginal results, prices oregon performance.

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