Solarfun Power Holdings Co. Ltd. (SOLF) recently spiked higher to a new multi-year high at $12.46 after reporting an average earnings surprise of 88% over the last four quarters. With a forward P/E of 6.5X, this Zacks #1 rank stock offers a unique combination of momentum and value.
Company Description
Solarfun Power Holdings Co. Ltd. is an investment holding company, develops and sells photovoltaic products and components. The company was founded in 2004 and has a market cap of $676 million.
The last update on Solarfun’s business came in late July when the company reported awesome Q2 results that easily beat expectations.
Second-Quarter Results
Revenue for the period was up 19% from last year to $259 million. Earnings also came in strong at 44 cents, 76% ahead of the Zacks Consensus Estimate, pushing the company’s average earnings surprise to 89% over the last four quarters.
Solarfun was able to scale its production nicely in order to meet increased demand, with PV (photovoltaic) shipments increasing to 205 MegaWatts from 151 Mw last year while the average selling price was down 6.8%.
The strong sales growth was accompanied by an ongoing emphasis on controlling costs, with its gross margin expanding to 21% from 18.5% last year.
Balance Sheet
Solarfun used the good quarter to strengthen its balance sheet, with cash and equivalents up $34 million from last year while its total debt fell $61 million to $265 million. The company’s debt-to-equity ratio of 27% is well below its peers 44%.
Estimates
Estimates took a nice jump on the strong quarter, with the current year up 76 cents to $1.82. The next-year estimate is up 49 cents in the same time to $1.44.
Valuation
With a forward P/E of 6.5X, SOLF trades at a discount to its peer’s 9.7X.
2-Year Chart
SOLF recently hit a new multi-year high of $12.46 after surging on the Q2 earnings surprise. The MACD below the chart is bullish, with the short-term average trending ahead of the long-term average. Look for support from the trend line on any weakness, take a look below.
SOLARFUN POWER (SOLF): Free Stock Analysis Report
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