Daqo New Energy Corp. (DQ): Find Out What Insiders Are Doing

Daqo New Energy Corp. (NYSE:DQ) finished Wednesday with an addition of $1.31 to close at $66.97, an upside of 2.00 percent. An average of 1,732,440 shares of common stock have been traded in the last five days. There was a gain of $10.53 in the past week. The last 20 days have seen an average of 1,619,425 shares traded, while the 50-day average volume stands at 1,892,040.

DQ stock has increased by 9.79% in the last month. The company shares reached their 1-month lowest point of $51.34 on 09/29/21. With the stock rallying to its 52-week high on 02/10/21, shares of the company touched a low of $33.33 and a high of $130.33 in 52 weeks. In spite of this, the price is down -48.62% from the 52-week high.

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Valuation Metrics

Daqo New Energy Corp. (DQ) has a trailing price-to-earnings (P/E) ratio of 12.45, which compares with the 31.10 for the broader industry and 37.24 for the sector. In the last five years, Daqo New Energy Corp.’s PE ratio has ranged between 73.45 and 2.832. The stock’s beta is 0.74. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 4.67, the price-to-book (PB) ratio at 4.50.

The quick ratio of Daqo New Energy Corp. for the three months ended June 29 was 1.00, and the current ratio was 1.10, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.06 and a total debt to equity ratio of 0.18 for the quarter ending June 29. On the profitability front, the trailing 12-month gross margin is 53.90% against a 5-year average of 34.9%. Daqo New Energy Corp.’s EBITDA margin for the year ending June 29 is 37.94%, while its operating margin for the same period stands at 49.80%. Its gross profit as reported stood at $233.99 million compared to revenue of $675.6 million.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, Daqo New Energy Corp.’s return on assets was 29.20%, compared to 7.6% over the last five years. In the past year, the return on investment has been 15.80%, and the 5-year average is 11.3%. Meanwhile, the return on equity (ROE) for the past 12 months has been 48.50% and the 5-year average holds at 15.6%. For the broader industry, ROE averaged -0.25 over the past year.

Earnings Surprise

The analyst consensus anticipated Daqo New Energy Corp.’s latest quarter earnings to come in at $3.29 per share, but it turned out to be $3.03, a -7.90% surprise. For the quarter, EBITDA amounted to $292.42 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at Daqo New Energy Corp. (DQ) price momentum. RSI 9-day as of the close on 13 October was 70.55%, suggesting the stock is Overbought, with historical volatility in this time frame at 66.00%.

As of today, DQ’s price is $61.38 +18.66% or $10.53 from its 5-day moving average. DQ is currently trading +7.74% higher than its 20-day SMA and -14.10% lower than its 100-day SMA. However, the stock’s current price level is +10.08% above the SMA50 and +18.22% above the SMA200.

The stochastic %K and %D were 87.82% and 73.85%, respectively, and the average true range (ATR) was 4.04. With the 14-day stochastic at 87.96% and the average true range at 4.09, the RSI (14) stands at 63.39%. The stock has reached 5.42 on the 9-day MACD Oscillator while the 14-day reading was at 7.36.

Analyst Ratings

Daiwa Securities downgraded Daqo New Energy Corp. (NYSE: DQ) to a an Outperform rating in its most recent analyst report. Previously, the stock was rated as a a Buy.The consensus rating for Daqo New Energy Corp. (DQ) among analysts is Overweight. According to current brokerage recommendations, 0 brokerage firms advise that investors sell DQ, while 3 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 4 analysts, while 6 others rate it as a “buy”.

What is DQ’s price target for the next 12 months?

Analysts predict a range of price targets between $52.00 and $181.00, with a median target of $97.90. Taking a look at these predictions, the average price target given by analysts for Daqo New Energy Corp. (DQ) stock is $97.39.


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