Daqo New Energy (NYSE:DQ): Evaluating Valuation After $100 Million Buyback Plan and Q2 Earnings Update

Daqo New Energy (NYSE:DQ) is making headlines this week after unveiling a $100 million share buyback program, a move that tends to get any investor’s attention. Management says they will tap existing cash reserves for the repurchases, which sends a clear signal about their view of the company’s future. This announcement landed alongside Daqo’s Q2 earnings, which showed that losses, while still considerable, have improved compared to last year, and was followed up by updated production guidance for the next quarter and full year. These consecutive updates are helping to shape a new narrative for Daqo New Energy. Over the past year, the stock has more than doubled, climbing 90%, and momentum has only picked up in recent months as the seven-day and one-month returns both moved into positive territory. The company’s longer-term track record remains mixed, with three-year returns still down, but the latest initiatives are shifting both risk perceptions and the conversation around valuation. With such an eventful period and notable short-term performance, the question arises: are investors looking at a real buying opportunity, or is the market already pricing in all the potential upside at this point?

Most Popular Narrative: 14.5% Overvalued

The prevailing narrative among analysts and market watchers is that Daqo New Energy is trading above its estimated fair value, factoring in optimistic assumptions about future recovery and growth.

Recent regulatory interventions by Chinese authorities to curb irrational competition and enforce sales above production costs are expected to stabilize polysilicon prices and improve industry profitability. These measures directly support future revenue and margins for Daqo. Global momentum in solar installations, driven by policy incentives and increasing cost-competitiveness of solar power, remains robust. This positions Daqo to benefit from sustained long-term demand growth, which supports a recovery in sales volumes and top-line growth once market conditions normalize.

How do analysts justify this bold valuation? Their narrative relies on aggressive profit turnarounds, ambitious revenue rebounds, and return multiples that set the stage for big market moves. Want to see which forecasts drive the gap between current price and target? Dive deeper into the underlying numbers that shape this valuation story.

Result: Fair Value of $24.43 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent industry overcapacity or delays in regulatory support could undermine profitability and challenge the optimistic outlook reflected in current valuations.

Find out about the key risks to this Daqo New Energy narrative.

Another View: Discounted Cash Flow Perspective

The SWS DCF model provides a very different view for Daqo New Energy, suggesting the stock may actually be deeply undervalued rather than overvalued. Is this model identifying something that others may be missing?

Look into how the SWS DCF model arrives at its fair value.

Stay updated when valuation signals shift by adding Daqo New Energy to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Daqo New Energy Narrative

If you see the story differently or want to dig into the numbers on your own, you can craft your own view in just a few minutes. Do it your way

A great starting point for your Daqo New Energy research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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