On May 17 a major solar company will report eanrings for the pivotal first quarter of 2014. And whether they exceed or disappoint, green energy investors can expect some volatile action to close out the trading week.
Canadian Solar (CSIQ) is by no means the hottest solar company investment, or even the most dependable. But it does have a track record of moving the entire industry. Most of the major players seem to have this capability: what happens to Canadian Solar affects First Solar (FSLR). What happens to First Solar affects SolarCity (SCTY). Whether it is deserved or not, solar stocks tend to move in tandem. And May 17 is no exception.
Canadian Solar could keep solar plays from moving wildly up or down if they hit expectations exactly. But with a wild winter quarter that saw the company shuttle construction plans on a major plant, not to mention the unusual wintry conditions that certainly affected an industry literally powered by the elements, lack of surprise would be the real surprise here.
Analysts are calling for Canadian Solar to earn $0.08 a share, which is a 180 percent increase over the prior year. However, the solar market has already incorporated this growth and then some. And, of course, what happens to Canadian Solar happens to other major solar companies as well, who have experiencend recent pullbacks of their own, despite monstrous growth.
Part of this can be attributed to macroeconomic conditions as well, with a recent exodus from growth stocks tempering the meteoric valuation rise of fast-growing clean energy companies. But macro is only part of the story. Canadian Solar’s earnings will be another major part, and act as a catalyst which should cause solar stocks either break upwards... or downwards.
Canadian Solar’s growth already outpaces the industry, so it will take a real bang-bang quarter to beat that. If they do though, expect solar as a monolith to rise.
The Guelph, Ontario-based Candian Solar reports before the bell.