Solar Stocks: Navigating Growth and Value in a Shifting Market

Summary:

Investors now favor solar firms with solid profits and fair valuations. Xinyi offers efficiency, ReNew higher-risk growth, while Array is rebounding.

Investor enthusiasm for solar stocks is being tested once again. As the sector faces volatile sentiment, evolving policy signals, and a sharper focus on profitability, the key challenge lies in balancing growth potential with valuation discipline and margin resilience.

Following a phase of exuberance and correction, the solar industry is recalibrating. Investors are now seeking companies that can combine scale with sound profitability and compelling valuations. Using our Stock Screener, we identified solar stocks meeting the following criteria: a market capitalization above $500 million, a three-year compound annual growth rate (CAGR) above 10%, an EBITDA margin of at least 15% in the latest fiscal year, and an enterprise value-to-EBITDA multiple no higher than 15 times. We also emphasized a strong short-term outlook, based on our Trader Rating universe.

This screening surfaced three names that embody today’s trade-offs between growth, value, and operational quality: Xinyi Energy Holdings, ReNew Energy Global, and Array Technologies.

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Efficiency and value: Xinyi Energy’s disciplined edge

Sector: Utilities

Xinyi Energy Holdings stands out for its exceptional profitability and operational efficiency. Focused on managing solar farms in China, the company reported an EBITDA margin of 91.5%, far above the screened universe’s weighted average of 41.8%. Its EV/EBITDA ratio of 5.9x also sits comfortably below the peer average of 7.8x, underscoring its valuation appeal.

The stock has gained 47.7% over the past year and 38.0% over six months, though its three-year return remains negative at -40.4%. Revenue has grown at a 13.5% CAGR, meeting the screen’s growth threshold but lagging the group average.

Our MarketScreener Investor Rating is 4.5★, reflecting solid fundamentals, while the Trader Rating ranks at the top of our range, signaling favorable short-term sentiment. With EBITDA, EBIT, and net margins all in the upper decile, Xinyi combines high profitability, attractive valuation, and recent price momentum—an appealing mix for investors seeking stability in the solar utility segment.

Key Dates: No upcoming events disclosed.

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Growth at a price: ReNew’s high-powered expansion

Sector: Utilities

ReNew Energy Global, one of India’s renewable energy leaders, offers a contrasting profile—strong growth and margins, paired with higher leverage risk. The company posted an EBITDA margin of 81.6%, more than double the screen’s average, and trades at an EV/EBITDA multiple of 10.5x, still below peers. Its three-year revenue CAGR of 19.1% surpasses both Xinyi and the group average.

The stock is up 10.4% year-to-date and 19.5% over six months, though it fell 10.8% last year. Over three years, the total return is 27.2%. Profitability and growth metrics remain strong, but gearing and leverage ratios rank at the lower end of our universe, highlighting balance-sheet risk.

Our Investor Rating is neutral at 1.5★, yet the Trader Rating remains in the upper range, suggesting constructive short-term sentiment. ReNew’s ability to sustain strong margins and rapid expansion—despite capital intensity—makes it a choice for investors willing to embrace higher risk in pursuit of growth.

Key Dates: No upcoming events disclosed.

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Recovery in motion: Array’s cyclical comeback

Sector: Energy

Array Technologies, a key provider of solar tracker systems, represents a turnaround story built on improving execution and sentiment. The company posted a 19.0% EBITDA margin, modestly below the screen average but comfortably above the minimum threshold, with an EV/EBITDA multiple of 7.1x—attractive both relative to peers and its five-year history.

Momentum has returned. In Q2 2025, net income reached $28.5 million, beating consensus by 147.3%, while EPS of $0.19 exceeded expectations by 169.1%. Quarterly net sales hit $362.2 million, 25.4% above forecasts, and EBITDA of $63.6 million surpassed estimates by 19.1%. This marks a sharp turnaround from the prior year’s $296.1 million net loss and -$1.95 EPS.

The stock has rebounded 39.2% year-to-date and 25.5% over the past year, after plunging 64.1% in 2024. Analyst sentiment is now “OUTPERFORM”, with an average target price of $10.22, implying a 21.5% upside. Our Investor Rating is neutral at 2.0★, and the Trader Rating sits in the upper range, reflecting improving visibility and renewed momentum.

Key Dates: November 5, 2025 – Q3 2025 Earnings Release.

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A sector finding its balance

Xinyi Energy Holdings leads with profitability and valuation discipline, ReNew Energy Global delivers faster growth with higher risk, and Array Technologies is regaining its footing through operational improvement. Each story illustrates a different way to navigate the solar sector’s evolving balance between growth, value, and risk. By applying rigorous filters for scale, profitability, and valuation, investors can pinpoint opportunities that stand to benefit as the industry enters its next phase of maturity.

Source: marketscreener

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