Daqo New Energy (DQ) AI Stock Analysis

• Market Cap: $2.03B
• Dividend Yield: N/A
• Average Volume (3M): 1.18M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.00
• Revenue Growth: -51.39%
• EPS Growth: -176.97%
• Country: US
• Employees: 4,749
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): -0.08
• Shares Outstanding: 67,056,720
• 10 Day Avg. Volume: 941,252
• 30 Day Avg. Volume: 1,178,036
• PEG Ratio: 0.02
• Price to Book (P/B): 0.29
• Price to Sales (P/S): 1.25
• P/FCF Ratio: -1.62
• Enterprise Value/Market Cap: 1.18
• Enterprise Value/Revenue: 4.06
• Enterprise Value/Gross Profit: -8.33
• Enterprise Value/Ebitda: -8.88
• 1Y Price Target: $29.89
• Price Target Upside: -1.94% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 42 Neutral
• Price Target: ―

Daqo New Energy's overall stock score reflects a challenging financial and operational environment. Declining revenues and profitability, along with negative cash flow, weigh heavily on the financial performance. Technical analysis indicates bearish momentum with the stock trading below key moving averages. Valuation concerns arise from a negative P/E ratio and lack of dividend yield. Despite a strong balance sheet with no debt, the short-term outlook remains uncertain given market conditions and operational challenges.

Positive Factors

Strong Balance Sheet

A debt-free balance sheet with significant liquidity provides financial stability and flexibility, enabling the company to navigate market downturns and invest in growth opportunities.

Positive Industry Outlook

The strong growth in solar PV installations in China indicates a promising long-term demand for polysilicon, supporting Daqo's market position and potential revenue growth.

Cost Reduction

Reducing production costs enhances margin sustainability and competitiveness, allowing Daqo to better withstand pricing pressures and improve profitability over the long term.

Negative Factors

Revenue Decline

A significant decline in revenue indicates challenges in market demand and pricing, which could impact the company's ability to generate consistent cash flow and sustain operations.

Negative Profit Margins

Negative profit margins reflect operational inefficiencies and market challenges, posing risks to financial health and the ability to invest in future growth.

Reduced Utilization Rates

Lower utilization rates suggest underutilization of assets, leading to inefficiencies and increased per-unit costs, which can strain profitability and operational effectiveness.

Daqo New Energy Business Overview & Revenue Model

Company Description

Daqo New Energy Corp. (DQ) is a leading manufacturer in the renewable energy sector, specializing in the production of high-purity polysilicon. The company's core product, polysilicon, is a critical raw material used in the solar photovoltaic (PV) industry for the manufacture of solar wafers and cells. Headquartered in China, Daqo New Energy operates state-of-the-art production facilities designed to meet the growing demand for solar energy components worldwide.

How the Company Makes Money

Daqo New Energy makes money primarily through the production and sale of high-purity polysilicon to solar manufacturers. The company sells its product to major solar wafer manufacturers, who then use it to produce solar cells and modules. Daqo's revenue streams are significantly influenced by polysilicon prices, production volumes, and long-term supply agreements with key clients. The company benefits from economies of scale and technological advancements that enhance production efficiency and cost-effectiveness. Additionally, strategic partnerships with industry players and a strong focus on maintaining high-quality standards contribute to Daqo's earnings and market position.

Daqo New Energy Financial Statement Overview

Summary

Daqo New Energy is currently facing a challenging financial landscape. The income statement shows declining revenues and profitability, impacting overall financial stability. The balance sheet remains fairly strong with no debt, but declining equity is a concern. Cash flow performance has deteriorated, raising questions about the company's ability to sustain operations without positive cash flow.

Income Statement

Daqo New Energy's income statement reveals a challenging financial period. The company experienced a significant drop in total revenue from $4.6 billion in 2022 to $1.03 billion in 2024, reflecting a sharp revenue decline. The gross profit margin turned negative in 2024, indicating the cost of goods sold exceeded revenue. Additionally, both EBIT and net income margins are negative, demonstrating declining operational and overall profitability. While the past showed strong growth, recent performance highlights instability and potential market challenges.

Balance Sheet

Daqo's balance sheet indicates a mixed financial position. Positive aspects include zero total debt in 2024, suggesting no leverage risk and a healthy cash position with $2.1 billion in cash and equivalents. However, stockholders' equity has decreased from 2023 to 2024, and the equity ratio remains stable but not improving. The company’s ability to maintain a debt-free status is commendable, yet declining equity may pose future challenges.

Cash Flow

Daqo's cash flow statement reveals pressure on cash generation. Operating cash flow turned negative in 2024, indicating potential difficulties in generating cash from core operations. Free cash flow has also significantly decreased, suggesting reduced financial flexibility. While the company previously enjoyed strong free cash flow growth, recent trends indicate a challenging cash flow environment that could impact future operations and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	593.22M	1.03B	2.31B	4.61B	1.68B	675.60M
Gross Profit	-289.08M	-212.93M	920.65M	3.41B	1.10B	233.99M
EBITDA	-271.25M	-179.88M	932.32M	3.15B	1.13B	188.76M
Net Income	-389.49M	-345.21M	429.55M	1.82B	748.92M	129.19M
Balance Sheet
Total Assets	6.29B	6.42B	7.43B	7.59B	3.34B	1.24B
Cash, Cash Equivalents and Short-Term Investments	1.02B	2.14B	3.04B	3.53B	1.00B	76.60M
Total Debt	0.00	6.82M	0.00	20.69M	0.00	243.09M
Total Liabilities	483.13M	560.38M	978.58M	948.24M	672.53M	440.23M
Stockholders Equity	4.33B	4.36B	4.76B	4.85B	2.17B	767.12M
Cash Flow
Free Cash Flow	-417.74M	-794.50M	429.20M	1.22B	130.16M	91.41M
Operating Cash Flow	-264.78M	-437.72M	1.62B	2.47B	639.10M	209.70M
Investing Cash Flow	-140.19M	-1.48B	-1.20B	-1.00B	-782.00M	-118.49M
Financing Cash Flow	-4.43M	-47.36M	-795.40M	1.47B	736.23M	-95.47M

Daqo New Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 30.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DQ, the sentiment is Positive. The current price of 30.48 is above the 20-day moving average (MA) of 27.44, above the 50-day MA of 26.77, and above the 200-day MA of 19.95, indicating a bullish trend. The MACD of 0.52 indicates Negative momentum. The RSI at 61.87 is Neutral, neither overbought nor oversold. The STOCH value of 84.19 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DQ.

Daqo New Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UMC	―	$18.67B	15.40	10.98%	6.54%	5.46%	-26.72%
ON	―	$21.02B	47.96	5.72%	―	-17.93%	-75.83%
ASX	―	$28.87B	27.23	10.97%	2.47%	4.86%	6.44%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
STM	―	$22.26B	44.32	3.00%	1.40%	-17.33%	-76.71%
MCHP	―	$33.75B	―	-2.24%	2.91%	-35.70%	-113.08%
DQ	―	$2.03B	―	-7.58%	―	-51.39%	-176.97%