Why Polysilicon Company Daqo New Energy's Shares Are Diving Monday
Portfolio Pulse from Lekha Gupta
Daqo New Energy Corp. (NYSE:DQ) shares fell after missing Q1 FY24 EPS and sales estimates, with revenue and gross profit significantly lower than the previous year. Despite higher production volume, the company's polysilicon average selling price and margins declined. Daqo Energy maintains its production forecast for FY24 and plans to start pilot production at its new facility in Q2 2024. The stock's movement can impact investors in Invesco Solar ETF (NYSE:TAN) and ProShares S&P Kensho Cleantech ETF (NYSE:CTEX).
April 29, 2024 | 5:08 pm
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NEGATIVE IMPACT
ProShares S&P Kensho Cleantech ETF (CTEX) investors may see an impact due to Daqo New Energy's Q1 performance, given its relevance to the cleantech sector.
Given CTEX's focus on the cleantech sector, Daqo New Energy's disappointing Q1 results and subsequent stock price decline may indirectly affect the ETF's performance, especially if DQ constitutes a significant part of the ETF's portfolio.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 75
NEGATIVE IMPACT
Daqo New Energy missed Q1 FY24 EPS and sales estimates, with significant declines in revenue, gross profit, and margins despite a production volume increase.
The significant miss in earnings and sales estimates, coupled with a substantial decline in revenue and gross profit, directly impacts investor sentiment and stock price in the short term. The decrease in polysilicon average selling price and contracting margins further exacerbate the negative outlook, leading to a likely decrease in stock price.
CONFIDENCE 90
IMPORTANCE 95
RELEVANCE 100
NEGATIVE IMPACT
Investors in Invesco Solar ETF (TAN) are impacted by Daqo New Energy's performance due to its inclusion in the ETF's holdings.
As Daqo New Energy is a component of the Invesco Solar ETF, its underperformance and stock price decline negatively affect the ETF's overall performance. Given the specific focus on solar energy, DQ's results are particularly relevant for TAN's short-term movement.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 75