When you look at NYSE:DQ, it's hard to ignore the strong fundamentals, especially considering its likely undervaluation.

Last update: Mar 8, 2024

Discover DAQO NEW ENERGY CORP-ADR (NYSE:DQ)—an undervalued stock our stock screener has picked out. NYSE:DQ demonstrates solid fundamentals, including health and profitability, all while staying attractively priced. Let's explore the details.

Assessing Valuation Metrics for NYSE:DQ

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:DQ boasts a 7 out of 10:

Based on the Price/Earnings ratio, DQ is valued cheaper than 89.62% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.03, DQ is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 6.41, the valuation of DQ can be described as very cheap.
Based on the Price/Forward Earnings ratio, DQ is valued cheaper than 98.11% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.06, DQ is valued rather cheaply.
DQ's Price/Free Cash Flow ratio is rather cheap when compared to the industry. DQ is cheaper than 100.00% of the companies in the same industry.
The excellent profitability rating of DQ may justify a higher PE ratio.
A more expensive valuation may be justified as DQ's earnings are expected to grow with 13.69% in the coming years.

Evaluating Profitability: NYSE:DQ

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:DQ has achieved a 8:

DQ has a better Return On Assets (5.66%) than 60.38% of its industry peers.
DQ has a better Return On Invested Capital (9.50%) than 69.81% of its industry peers.
DQ had an Average Return On Invested Capital over the past 3 years of 24.97%. This is significantly above the industry average of 11.80%.
The 3 year average ROIC (24.97%) for DQ is well above the current ROIC(9.50%). The reason for the recent decline needs to be investigated.
The Profit Margin of DQ (18.24%) is better than 71.70% of its industry peers.
In the last couple of years the Profit Margin of DQ has grown nicely.
DQ has a Operating Margin of 33.94%. This is amongst the best in the industry. DQ outperforms 91.51% of its industry peers.
DQ's Operating Margin has improved in the last couple of years.
In the last couple of years the Gross Margin of DQ has grown nicely.

Assessing Health Metrics for NYSE:DQ

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NYSE:DQ scores a 7 out of 10:

There is no outstanding debt for DQ. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
A Current Ratio of 4.20 indicates that DQ has no problem at all paying its short term obligations.
The Current ratio of DQ (4.20) is better than 67.92% of its industry peers.
DQ has a Quick Ratio of 4.00. This indicates that DQ is financially healthy and has no problem in meeting its short term obligations.
DQ's Quick ratio of 4.00 is fine compared to the rest of the industry. DQ outperforms 71.70% of its industry peers.

Assessing Growth Metrics for NYSE:DQ

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:DQ has received a 6 out of 10:

Measured over the past years, DQ shows a very strong growth in Earnings Per Share. The EPS has been growing by 119.60% on average per year.
The Revenue has been growing by 50.24% on average over the past years. This is a very strong growth!
Based on estimates for the next years, DQ will show a quite strong growth in Earnings Per Share. The EPS will grow by 13.69% on average per year.
Based on estimates for the next years, DQ will show a quite strong growth in Revenue. The Revenue will grow by 12.39% on average per year.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

Check the latest full fundamental report of DQ for a complete fundamental analysis.

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.