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    Benign Growth For Canadian Solar Inc. (NASDAQ:CSIQ) Underpins Stock's 33% Plummet

    Simply Wall St·12/14/2025 12:36:31
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    The Canadian Solar Inc. (NASDAQ:CSIQ) share price has softened a substantial 33% over the previous 30 days, handing back much of the gains the stock has made lately. Still, a bad month hasn't completely ruined the past year with the stock gaining 78%, which is great even in a bull market.

    Even after such a large drop in price, Canadian Solar may still be sending very bullish signals at the moment with its price-to-sales (or "P/S") ratio of 0.3x, since almost half of all companies in the Semiconductor industry in the United States have P/S ratios greater than 5.4x and even P/S higher than 11x are not unusual. However, the P/S might be quite low for a reason and it requires further investigation to determine if it's justified.

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    See our latest analysis for Canadian Solar

    ps-multiple-vs-industry
    NasdaqGS:CSIQ Price to Sales Ratio vs Industry December 14th 2025

    How Has Canadian Solar Performed Recently?

    While the industry has experienced revenue growth lately, Canadian Solar's revenue has gone into reverse gear, which is not great. The P/S ratio is probably low because investors think this poor revenue performance isn't going to get any better. If you still like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.

    If you'd like to see what analysts are forecasting going forward, you should check out our free report on Canadian Solar.

    What Are Revenue Growth Metrics Telling Us About The Low P/S?

    In order to justify its P/S ratio, Canadian Solar would need to produce anemic growth that's substantially trailing the industry.

    In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 4.5%. The last three years don't look nice either as the company has shrunk revenue by 16% in aggregate. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.

    Turning to the outlook, the next three years should generate growth of 12% per annum as estimated by the eleven analysts watching the company. With the industry predicted to deliver 28% growth per year, the company is positioned for a weaker revenue result.

    With this in consideration, its clear as to why Canadian Solar's P/S is falling short industry peers. Apparently many shareholders weren't comfortable holding on while the company is potentially eyeing a less prosperous future.

    What We Can Learn From Canadian Solar's P/S?

    Having almost fallen off a cliff, Canadian Solar's share price has pulled its P/S way down as well. Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

    We've established that Canadian Solar maintains its low P/S on the weakness of its forecast growth being lower than the wider industry, as expected. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. It's hard to see the share price rising strongly in the near future under these circumstances.

    We don't want to rain on the parade too much, but we did also find 3 warning signs for Canadian Solar that you need to be mindful of.

    If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).