Is JinkoSolar (JKS) Offering Value After Recent Share Price Volatility And Cash Flow Outlook

• If you are wondering whether JinkoSolar Holding’s current share price gives you good value, this article will walk through what the numbers actually say about the stock.
• The share price closed at US$25.81 most recently, with returns of 1.4% over the past week, a 1.9% decline over the past month, a 7.6% decline year to date, and a 30.8% gain over the last year, while the 3 year and 5 year returns are 45.1% and 50.4% declines respectively.
• Recent interest in solar and semiconductor related names has kept JinkoSolar on many watchlists as investors weigh up the stock’s mixed return profile over different time frames. This backdrop, combined with sector wide attention on costs and profitability, helps frame why the current price is drawing closer scrutiny.
• Right now, JinkoSolar scores 5 out of 6 on Simply Wall St’s valuation checks. This suggests several methods point to potential value. Next, we will compare those methods, then finish by looking at a more complete way to think about what the valuation really means for you.

Find out why JinkoSolar Holding's 30.8% return over the last year is lagging behind its peers.

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

A Discounted Cash Flow, or DCF, model estimates what a company could be worth today by projecting its future cash flows and then discounting those back to the present. In this case, the model used is a 2 Stage Free Cash Flow to Equity approach.

JinkoSolar’s latest twelve month free cash flow is reported at CN¥4,872.1m. The model then projects free cash flow out to 2035, with CN¥995.4m in 2026 rising through a series of annual estimates and extrapolations to CN¥5,321.8m by 2035. Analysts provide inputs for the earlier years, and Simply Wall St extrapolates the later years to complete the 10 year path.

All of those future cash flows are discounted back to today and summed to arrive at an estimated intrinsic value of US$83.49 per share. Compared with the recent share price of US$25.81, the DCF output suggests the stock trades at a 69.1% discount, which screens as significantly undervalued on this model alone.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests JinkoSolar Holding is undervalued by 69.1%. Track this in your watchlist or portfolio, or discover 870 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 earnings can be volatile or less meaningful, the P/S ratio is often a useful way to think about value because it compares what you pay for each dollar of revenue, rather than profit. Investors usually accept a higher or lower “normal” P/S depending on what they expect for future growth and how much risk they see in the business, with higher growth and lower perceived risk often justifying a higher multiple.

JinkoSolar currently trades on a P/S of 0.13x. That sits well below the Semiconductor industry average P/S of 5.81x and also below the peer average of 1.82x that Simply Wall St tracks for similar companies. On the surface, this points to a low valuation relative to both the wider industry and closer peers.

Simply Wall St’s Fair Ratio for JinkoSolar is 1.28x, which is its estimate of what a reasonable P/S might be after factoring in elements such as earnings growth, profit margins, industry, market cap and specific risks. This Fair Ratio can be more informative than a simple peer or industry comparison because it adjusts for these company specific characteristics. With the current P/S of 0.13x well below the 1.28x Fair Ratio, the stock screens as undervalued on this metric.

Result: UNDERVALUED

P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1414 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 understand valuation, so let us introduce you to Narratives. These are simply your story about JinkoSolar Holding, linked directly to your assumptions about its future revenue, earnings and margins. They are then translated into a forecast and a fair value estimate on Simply Wall St’s Community page, where millions of investors can compare their view against the current share price, see whether their fair value points to a buy or sell decision, and watch their Narrative update automatically as new news or earnings arrive. For example, one investor might build a Narrative that sees JinkoSolar’s fair value far above today’s price based on optimistic margin assumptions, while another might set a much lower fair value due to more cautious revenue expectations.

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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