DAQO New Energy (NYSE:DQ) Shares Gap Down - Time to Sell?

Key Points

• DAQO New Energy's stock price gapped down from $27.74 to $26.90 before closing at $26.55, with analysts providing mixed ratings and price targets.
• The company recently announced a $100 million stock buyback program, suggesting management believes shares are undervalued.
• In its latest earnings report, DAQO New Energy posted a negative EPS of ($1.14), despite beating analyst expectations of ($1.16), as revenue totaled $75.19 million versus estimates of $140.54 million.

DAQO New Energy Corp. (NYSE:DQ - Get Free Report)'s stock price gapped down prior to trading on Wednesday . The stock had previously closed at $27.74, but opened at $26.90. DAQO New Energy shares last traded at $26.55, with a volume of 267,435 shares.

Analysts Set New Price Targets

Several research firms have recently commented on DQ. HSBC upgraded DAQO New Energy from a "hold" rating to a "buy" rating and set a $31.00 price objective for the company in a research note on Wednesday, August 27th. Wall Street Zen downgraded shares of DAQO New Energy from a "hold" rating to a "sell" rating in a research note on Sunday. Glj Research reissued a "buy" rating and issued a $30.51 target price on shares of DAQO New Energy in a research note on Tuesday, August 26th. Hsbc Global Res raised shares of DAQO New Energy from a "hold" rating to a "strong-buy" rating in a research note on Wednesday, August 27th. Finally, Citigroup boosted their target price on shares of DAQO New Energy from $27.00 to $37.00 and gave the company a "buy" rating in a research note on Monday. Two equities research analysts have rated the stock with a Strong Buy rating, four have issued a Buy rating and one has issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has an average rating of "Buy" and an average price target of $28.10.

DAQO New Energy Stock Performance

The stock has a market capitalization of $1.75 billion, a price-to-earnings ratio of -4.48 and a beta of 0.50. The business has a 50-day moving average of $22.42 and a 200-day moving average of $17.98.

DAQO New Energy (NYSE:DQ - Get Free Report) last issued its earnings results on Tuesday, August 26th. The semiconductor company reported ($1.14) earnings per share (EPS) for the quarter, topping analysts' consensus estimates of ($1.16) by $0.02. DAQO New Energy had a negative return on equity of 6.54% and a negative net margin of 65.64%.The business had revenue of $75.19 million during the quarter, compared to the consensus estimate of $140.54 million. On average, research analysts predict that DAQO New Energy Corp. will post -3.5 earnings per share for the current fiscal year.

DAQO New Energy announced that its board has initiated a stock repurchase program on Tuesday, August 26th that allows the company to buyback $0.00 in shares. This buyback authorization allows the semiconductor company to purchase shares of its stock through open market purchases. Stock buyback programs are typically an indication that the company's leadership believes its shares are undervalued.

Institutional Trading of DAQO New Energy

A number of hedge funds have recently made changes to their positions in DQ. Continental General Insurance Co. boosted its stake in shares of DAQO New Energy by 0.8% during the 1st quarter. Continental General Insurance Co. now owns 5,966,202 shares of the semiconductor company's stock valued at $108,048,000 after buying an additional 50,000 shares during the last quarter. Mackenzie Financial Corp grew its stake in DAQO New Energy by 1.4% during the 2nd quarter. Mackenzie Financial Corp now owns 1,866,454 shares of the semiconductor company's stock worth $28,314,000 after buying an additional 26,100 shares during the last quarter. Vanguard Group Inc. raised its stake in DAQO New Energy by 1.5% during the 1st quarter. Vanguard Group Inc. now owns 1,745,544 shares of the semiconductor company's stock valued at $31,612,000 after acquiring an additional 26,359 shares in the last quarter. Goldman Sachs Group Inc. raised its stake in DAQO New Energy by 117.2% during the 1st quarter. Goldman Sachs Group Inc. now owns 1,159,835 shares of the semiconductor company's stock valued at $21,005,000 after acquiring an additional 625,900 shares in the last quarter. Finally, Point72 Asset Management L.P. raised its stake in DAQO New Energy by 67.5% during the 4th quarter. Point72 Asset Management L.P. now owns 886,655 shares of the semiconductor company's stock valued at $17,237,000 after acquiring an additional 357,460 shares in the last quarter. Hedge funds and other institutional investors own 47.22% of the company's stock.

About DAQO New Energy

Daqo New Energy Corp., together with its subsidiaries, manufactures and sells polysilicon to photovoltaic product manufacturers in the People's Republic of China. Its products are used in ingots, wafers, cells, and modules for solar power solutions. The company was formerly known as Mega Stand International Limited and changed its name to Daqo New Energy Corp.

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