Why is JinkoSolar Stock Pulling Back Ahead of Earnings?

JinkoSolar lost 10.3% during Monday's session

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JinkoSolar Holding Co., Ltd. (NYSE:JKS) is one of the world’s largest solar panel manufacturers and a big player in the solar industry. The company distributes its solar products and offers its services to a diversified international utility, commercial, and residential customer base. Its customers are located in China, the U.S., Japan, Germany, the United Kingdom, Chile, South Africa, India, Mexico, Brazil, the United Arab Emirates, Italy, Spain, France, Belgium, and elsewhere. JinkoSolar has nine productions facilities globally and 21 overseas subsidiaries.

JinkoSolar stock has had its ups and downs over the past year. Shares of the alternative energy stock currently boast a 150% year-over-year return. Additionally, JKS has increased nearly 300% from its March 2020 low of $11.42. The most relevant note on stock performance, though, was the 10% drop in JKS stock price yesterday. Plus, the security is now down  is currently down roughly 50% from its mid-October all-time high.

JinkoSolar is scheduled to report its fourth-quarter earnings before the open on Thursday, March 11. JKS has outperformed earnings expectations in three of its last four earnings reports. For the fourth quarter of 2019, JinkoSolar beat analysts’ estimates by a margin of $0.01 and reported an earnings per share (EPS) of $1.40. For the first quarter of 2020, JKS' EPS dropped down to $0.65 and missed expectations by a margin of $0.35. For the second quarter of 2020, JinkoSolar posted an increase in earnings. The company reported an EPS of $1.20 and beat expectations by a margin of $0.59. In its most recent quarterly report, JinkoSolar reported an EPS of $1.06 and missed expectations by $0.21.

With JinkoSolar stock’s major downward move over the past month (especially yesterday), shares of JKS are now moving to an interesting price point. At its current valuation, JKS has a price-earnings ratio of 14.63. However, things become even more interesting when you look at its future numbers. JKS now has a forward price-earnings ratio of 11.81, making it an intriguing option as a growth investment play.

The solar energy company has added roughly $5.5 billion in revenues and more than $100 million in net profits over the past year. JinkoSolar has also maintained steady top line growth in recent years with its revenues growing 44% in the past four years. Its sales over the past 12 months now total $35.2 billion. JinkoSolar’s bottom-line growth has been even more incredible, with its net income increasing 650% since fiscal 2017. JKS profits now total $1 billion in the past year alone.

Overall, with yesterday's pullback, investors may want to consider picking up shares of JKS while the stock is still available at a discount.


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