Canadian Solar Inc. CSIQ recently signed an Operation & Maintenance agreement with Axium Infinity Solar LP for monitoring eight solar photovoltaic (PV) plants in Ontario, Canada. These plants boast a total solar power generation capacity of 105.5 Megawatt peak (MWp).
Details of the Deal
Per the terms of the agreement, in addition to plant monitoring, Canadian Solar will conduct performance management, preventative maintenance and corrective maintenance at the facilities. Through this deal, Canadian Solar aims at maximizing energy production, revenues and profitability at the PV plants.
Global Prospects
As renewables will probably replace fossil fuels as a source of electrical power, most utility providers across the globe are gradually shifting away from fossil fuel toward alternative energy. GTM Research’s latest ‘Global Solar Demand Monitor’ report states that 13 countries will surpass the 1 GW level of annual PV installations by the end of 2018. With solar being a major growth area in the renewable space, this is clearly a golden era for solar module producers like Canadian Solar.
Per another report by GTM research, the global solar market will continue grow to annual installations of more than 120 GW by 2022.
We believe that such huge growth opportunities in the global solar market along with the procurement of major agreements and contracts will help Canadian Solar witness substantial growth. This is reflected in the solid year-over-year improvement in the company’s third-quarter revenue as well as gross margin figures.
Price Movement
Shares of Canadian Solar have rallied 34.7% year to date, underperforming the industry’s gain of 57.8%. The underperformance may have been caused by stiff competition from cheaper alternatives like natural gas, given the current shale boom in the United States.
Zacks Rank & Key Picks
Canadian Solar carries a Zacks Rank #3 (Hold).
A few better-ranked stocks from the same sector are SolarEdge Technologies, SEDG, First Solar, Inc. FSLR and Sunrun Inc. RUN. While SolarEdge Technologies sports a Zacks Rank #1 (Strong Buy), First Solar and Sunrun carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SolarEdge Technologies posted an average positive earnings surprise of 24% in the past four quarters. The Zacks Consensus Estimate for its current-year earnings rose by 28 cents over the last 60 days.
First Solar has an average positive earnings surprise of 537.39% for the past four quarters. The Zacks Consensus Estimate for its current-year earnings has risen by 26 cents in the past 60 days.
Sunrun has an average positive earnings surprise of 75.67% for the past four quarters. The Zacks Consensus Estimate for its current-year earnings has risen by a penny in the past 60 days.
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