Is Canadian Solar, Inc. overvalued or undervalued?

As of 25 March 2025, the valuation grade for Canadian Solar, Inc. has moved from attractive to risky, indicating a significant shift in its financial outlook. The company is currently considered overvalued, particularly given its negative P/E ratio and low return metrics. Key ratios include a Price to Book Value of 0.27, an EV to EBITDA of 13.34, and a ROCE of -3.47%.
In comparison to its peers, Canadian Solar's EV to EBITDA ratio is notably higher than that of MaxLinear, Inc. at -9.91, and significantly worse than Semtech Corp., which has a P/E ratio of 89.37. The company's recent stock performance has lagged behind the S&P 500, with a one-year return of -35.76% compared to the index's 10.26%. This combination of poor financial ratios and underperformance relative to peers reinforces the assessment that Canadian Solar, Inc. is overvalued.