Should you buy Canadian Solar ahead of earnings after inking a long-term storage deal?

On Wednesday, Canadian Solar Inc. (NASDAQ:CSIQ) shares plunged nearly 5% despite announcing a lucrative long-term energy storage deal with PG&E Corp (NYSE:PCG). The Canadian renewable energy company said its subsidiary, Recurrent Energy, signed a 15-year resource adequacy agreement with the San Francisco, CA-based gas and electricity company to provide 600 MWh storage for its Crimson project in phase 2.

It will be part of the 1,400 MWh that will make the Crimson project one of the world’s largest battery storage projects when it goes online in the summer of 2022. However, investors still seem relatively pessimistic despite the positive news ahead of the company’s fiscal Q2 results on Thursday.

Canadian Solar shares surged more than 166% between August and January before plunging by 37%. The stock is now down more than 24% year-to-date, creating an attractive entry opportunity for green energy stock investors.

Should you invest in CSIQ shares in Q3 2021?

Although analysts expect Canadian Solar earnings per share to fall by 12.6% this year, its bottom line will grow by a whopping 143.74% next year, making it a compelling investment opportunity for growth investors.

From a valuation perspective, CSIQ shares trade at a trailing 12-mont P/E ratio of 41.88, which may seem steep for value investors. However, its forward P/E of 12.26 is exciting for investors willing to overlook the short-term turbulence ahead of next year’s exciting growth prospects.

Therefore, as Canadian Solar shares fall by nearly 5% ahead of Thursday’s earnings, it could be the perfect time to buy before the stock soars.

Technical overview: Canadian Solar stock price forecast for August 2021

Technically, Canadian Solar shares seem to be trading within an ascending channel formation despite the recent pullback. In addition, the stock is yet to hit overbought conditions in the 14-day RSI, leaving more room for upward movement.

Therefore, investors can target rebound profits at approximately $43.95 or higher at $47.43. The support levels are $37.66 and $33.95. The CSIQ shares traded at $40.77 as of this writing.

Bottom line: the case for buying the CSIQ stock price rebound

In summary, although CSIQ shares seem steeply priced based on the trailing 12-month P/E, the forward P/E suggests it could be potentially undervalued, factoring in earnings growth prospects.

Canadian solar panels have been in the market for a while. With this plummet, investing in their stocks could be seen as a wise move. Therefore, the recent pullback in the Canadian Solar stock price presents an attractive opportunity to buy ahead of its exciting growth story.