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JKS vs. FSLR: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
Updated
Tilly's (TLYS) closed the most recent trading day at $16.18, moving -0.98% from the previous trading session.

Investors with an interest in Solar stocks have likely encountered both JinkoSolar (JKS) and First Solar (FSLR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, JinkoSolar is sporting a Zacks Rank of #1 (Strong Buy), while First Solar has a Zacks Rank of #5 (Strong Sell). This means that JKS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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 5.48, while FSLR has a forward P/E of 30.51. We also note that JKS has a PEG ratio of 0.55. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FSLR currently has a PEG ratio of 2.78.

Another notable valuation metric for JKS is its P/B ratio of 0.46. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FSLR has a P/B of 1.09.

These metrics, and several others, help JKS earn a Value grade of A, while FSLR has been given a Value grade of C.

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
 
First Solar, Inc. (FSLR) : Free Stock Analysis Report
 
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