Assuming average selling prices of $1.80 to $2.00 per watt, about 15 percent to 25 percent below current levels, the 2010 consensus revenue estimate of $688 million equates to about 345 to 385 megawatt (MW) in unit shipments, analyst Sam Dubinsky said.
"This represents only 56 percent to 62 percent utilization, which is not easy to achieve, but far from aggressive," the analyst said, adding that the consensus 2010 earnings view of 59 cents a share also looked "conservative."
Dubinsky, who set a price target of $14 on the stock, also said considering Canadian Solar's healthy balance sheet, the company was underappreciated.
"Industry titans Suntech Power Holdings Inc and Yingli Green Energy Holding Co Ltd tend to take center stage, but Canadian Solar looks to be a cleaner story," he said.
The analyst noted that the upgraded metallurgic grade (UMG) silicon overhang was abating. Canadian Solar had adopted UMG silicon in the wake of soaring polysilicon prices.
"We believe Canadian Solar will deemphasize UMG in 2009 and shift capacity to mainstream modules. UMG has been an overhang as investors have questioned whether the product can gain traction in a declining poly pricing environment," he said.
Shares of the company were up 64 cents at $9.94 in recent trade. The stock is off more than 80 percent from the 52-week high of $51.80 it touched in June last year.