FSLR - The 3 Most Undervalued Solar Stocks to Buy in July 2024
2024-07-12 13:00:00 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Undervalued solar stocks are quality investments as they are tapping a market expected to grow 7.3% yearly until 2029. In 2023, solar energy generated 5.6% of U.S. power , up from 4.8% a year earlier; California has the most solar power, 27.3%. The momentum is further boosted by new taxes on Chinese solar panels , rising power demand and government funding.
Furthermore, local state governments are providing favorable tailwinds. Michigan enacted new legislation allowing homeowners groups to forbid solar installations, increasing residential solar adoption in the state. Additionally, the California Energy Commission is subsidizing counties and localities to implement automated solar permits, simplifying the installation procedure and lowering costs.
The U.S. Energy Information Administration forecasts 45 gigawatts of additional utility-scale solar projects will be installed in 2024. Among the many massive solar projects under construction throughout the nation are a 210-MW project in Mississippi and a 1.3-GW solar complex in Indiana.
For aggressive investors seeking undervalued solar stocks, these firms offer double-digit upsides, low valuations and an aggressive expansionary approach.
First Solar (FSLR)
Leveraging thin-film semiconductor technology, First Solar (NASDAQ: FSLR ) develops and produces photovoltaic solar modules.
FSLR’s large order backlogs and trustworthy financial reporting help it profit in a challenging market, yet it’s cheaper than 79% of its industry at 17 times forward price-to-earnings; analysts expect a 25% gain from the closing.
In nine of the previous 12 quarters, FSLR easily outperformed Wall Street forecasts, demonstrating its consistency. FSLR announced $2.20 earnings per share in the first quarter, up from the projec ted $1.99, and $794.11 million in revenue, 13.1% higher than the expert projections of $702.17 million. Thanks to high demand for its solar modules, net bookings were 2.7 GW at 31.3 cents per watt. First Solar can fund future development with a $1.4 billion cash sheet.
Additionally, First Solar’s 2026 production capacity overallocation is full. This ensures revenue balance and eliminates supply delays.
From the product standpoint, FSLR’s most recent Series 7 PV modules increase reliability and efficiency. Regarding expansion, First Solar is working on a $1.1 billion project in Iberia Parish, Louisiana, scheduled for completion in the first half of 2026. As a result, FSLR output will reach 25 gigawatts worldwide and 14 in the U.S.
Array Technologies (ARRY)
In utility-scale solar tracker technology, Array Technologies (NASDAQ: ARRY ) has positive cash flow visibility and a huge order backlog. Even though the stock price is down double digits this year, its expansion plans, like the $50 million investment in a Mexican solar manufacturing factory, position it for success. ARRY shares sell at a projected P/E of 9x, better than 93% of its industry , and analysts expect an 89% upside.
Array Technologies’ earnings of 6 cents beat estimates by 358% in the first quarter, and new orders exceeded $400 million , with an order book of $2.1 billion. Its solar monitoring options are popular, as its order book reached $1.9 billion at the end of the quarter, 110% more than last year.
In terms of new product developments, the latest version of the Array STI H250 expands Array Technologies’ offering. The STI H250 fits steep-angled blocks and uneven edges; the newest one cuts down on the number of piles per tracker, saving money.
For the local solar supply chain, Array Technologies is building a $50 million plant in New Mexico. Lock Joint Tube and Array Technologies are building a Texas steel tube factory to make utility-scale solar tubes using local steel.
In terms of overseas expansion, Array Technologies and Aluminum Products Company are leveraging Array’s sun-tracking technology and ALUPCO’s manufacturing skills to develop renewable energy projects in the Middle East.
Canadian Solar (CSIQ)
Canadian Solar (NASDAQ: CSIQ ) has a forward P/E ratio of 6.8, better than 98% of the sector, after falling approximately 37% in 2024. Analysts forecast CSIQ to rise over 73% from its closing price due to its substantial backlog and continued financing of big-scale solar projects like its $160 million Bayou Galion Solar project.
In the first quarter of 2024, Canadian Solar sold $1.3 billion and shipped 6.3 GW of solar modules , meeting its expectations. The firm leads worldwide solar development with a 26.3 GWp project pipeline and 56 GWh battery energy storage pipeline.
Canadian Solar’s e-storage branch created SolBank 3.0 utility-scale battery storage. Energy density cell and safety system improvements produce 2.35 MW and 5 MWh. This model offers 45% greater capacity and 40% faster commissioning .
BlackRock (NYSE: BLK ) is also investing $500 million in Canadian Solar’s Recurrent Energy to construct new projects and transition to a developer-plus long-term owner-and-operator plan in the U.S. and Europe.
In addition, Sol Systems is working with Canadian Solar to boost U.S. solar module production . Under their agreement, Canadian Solar will send its Texas-made high-efficiency N-Type TOPCon solar panels.
Canadian Solar is also building a 5 GW solar PV cell factory in Mesquite, Texas. This project will meet U.S. demand for solar goods and boost the company’s production capability.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.
More From InvestorPlace
The post The 3 Most Undervalued Solar Stocks to Buy in July 2024 appeared first on InvestorPlace .