Is It Time To Revisit JinkoSolar (JKS) After Recent Share Price Rebound?

• If you are wondering whether JinkoSolar Holding's current share price lines up with its underlying value, you are not alone. This article is built to help you answer that.
• Over the recent period, the stock closed at US$28.13, with returns of 6.9% over 7 days, 16.1% over 30 days, 0.7% year to date, 7.1% over 1 year, and longer term returns of 36.8% and 48.9% declines over 3 and 5 years respectively. These figures can shape how investors think about its risk and potential.
• Recent attention on JinkoSolar has been closely tied to sector wide discussions around solar demand, supply chain adjustments, and policy support for renewable energy, which often influence how investors price solar manufacturers. These themes can help explain why short term moves look different to the longer term return record.
• Simply Wall St currently assigns JinkoSolar Holding a valuation score of 5/6, based on how many of six checks indicate the shares are undervalued. Next we will walk through the usual valuation tools before finishing with a broader way to think about what that score really means.

Find out why JinkoSolar Holding's 7.1% return over the last year is lagging behind its peers.

Approach 1: JinkoSolar Holding Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes estimates of the cash a company could generate in the future and discounts those amounts back to what they might be worth today. It is essentially asking what those future cash flows are worth in present terms.

For JinkoSolar Holding, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flows in CN¥. The latest twelve month free cash flow is CN¥4,872.1m. Looking ahead, one of the explicit projections is free cash flow of CN¥1,705.1m in 2027, with further annual estimates out to 2035 provided by analysts for the early years and then extrapolated by Simply Wall St.

When all those projected cash flows are discounted back, the model arrives at an estimated intrinsic value of about US$83.07 per share. Compared with the recent share price of US$28.13, this implies the stock is 66.1% undervalued based on this DCF framework.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests JinkoSolar Holding is undervalued by 66.1%. Track this in your watchlist or portfolio, or discover 877 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for JinkoSolar Holding.

Approach 2: JinkoSolar Holding Price vs Sales

For companies where revenue is a key reference point and earnings can be volatile, the P/S ratio is often a useful way to think about value. It compares what the market is paying for each dollar of sales, which can be easier to interpret than earnings based metrics when profit margins move around.

In general, higher growth expectations and lower perceived risk can support a higher P/S ratio, while slower growth or higher risk tends to be associated with a lower multiple. That is why it helps to compare a company both with its industry and with its own fundamentals rather than looking at a single number in isolation.

JinkoSolar Holding currently trades on a P/S of 0.15x, compared with the Semiconductor industry average of 5.78x and a peer average of 11.09x. Simply Wall St also calculates a Fair Ratio of 1.34x. This is its proprietary view of what a reasonable P/S might be after factoring in elements such as earnings growth, industry, profit margins, market cap and company specific risks. This Fair Ratio can be more tailored than a simple peer or industry comparison because it blends those drivers into a single benchmark. With the current 0.15x P/S sitting well below the 1.34x Fair Ratio, the shares screen as undervalued on this metric.

Result: UNDERVALUED

P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1448 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your JinkoSolar Holding Narrative

Earlier we mentioned that there is an even better way to think about value, and on Simply Wall St that starts with Narratives. Here, you set out your own story for JinkoSolar Holding, link it to concrete assumptions for future revenue, earnings and margins, and see how that flows through to a Fair Value that you can compare with the current price on the Community page. The whole view stays current as new news or earnings arrive. For example, one investor might build a JinkoSolar Narrative around stronger energy storage growth and use a Fair Value closer to US$66.10. Another might focus more on policy risks and margin pressure and anchor on a Fair Value nearer US$17.00. This gives you a clear, side by side sense of how different views translate into different numbers.

Do you think there's more to the story for JinkoSolar Holding? Head over to our Community to see what others are saying!

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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