Canadian Solar (NasdaqGS:CSIQ) is back in focus after subsidiary CS PowerTech opened the first phase of its PV cell facility in Jeffersonville, Indiana, marking a large US manufacturing and supply chain expansion.

Canadian Solar's Indiana announcement comes after a weak share price patch, with the stock down 42.19% year to date and 1.94% over 30 days. However, the 90 day share price return of 4.04% and 1 year total shareholder return of 15.22% suggest some momentum rebuilding from earlier lows.

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After Canadian Solar's recent rebound and the Indiana expansion, the gap between its US$14.69 share price, analyst targets, and intrinsic value estimates is wide enough to matter. So where does fair value realistically sit now?

Most Popular Narrative: 18.6% Undervalued

According to one of the most followed narratives on Canadian Solar, the fair value estimate of $18.05 sits above the recent $14.69 close, which puts more attention on how that gap is being justified.

CSIQ is an interesting stock because you're effectively buying two businesses in one:

• A solar equipment manufacturer (solar panels, batteries, storage systems)

• A renewable energy project developer/operator through Recurrent Energy, which develops, sells, and sometimes operates solar and battery storage projects.

According to TheTurntTomato, this fair value hinges on how those two Canadian Solar engines work together, from future revenue potential to where long term profit margins could settle. Want to see which assumptions about growth, storage demand and project monetisation are doing the heavy lifting in that $18.05 number.

Result: Fair Value of $18.05 (UNDERVALUED)

However, Canadian Solar's weak recent profitability and exposure to cyclical solar manufacturing and policy shifts could quickly challenge that undervalued narrative if conditions remain difficult.

Next Steps

With Canadian Solar pulled in different directions by both concern and optimism, it makes sense to move quickly and stress test the full picture yourself using the 3 key rewards and 2 important warning signs.

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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.