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JKS or RUN: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors interested in stocks from the Solar sector have probably already heard of JinkoSolar (JKS) and Sunrun (RUN). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

JinkoSolar and Sunrun are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that JKS has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

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Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

JKS currently has a forward P/E ratio of 4.42, while RUN has a forward P/E of 76.69. We also note that JKS has a PEG ratio of 0.22. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. RUN currently has a PEG ratio of 15.34.

Another notable valuation metric for JKS is its P/B ratio of 0.63. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, RUN has a P/B of 1.36.

Based on these metrics and many more, JKS holds a Value grade of B, while RUN has a Value grade of F.

JKS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that JKS is likely the superior value option right now.


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JinkoSolar Holding Company Limited (JKS) : Free Stock Analysis Report
 
Sunrun Inc. (RUN) : Free Stock Analysis Report
 
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Zacks Investment Research