Daqo New Energy Faces Critical Earnings Test

Daqo New Energy is approaching a pivotal moment as the polysilicon manufacturer prepares to release its third-quarter 2025 financial results this Monday. Market expectations reveal divided forecasts, with some analysts projecting an EPS of -$0.70 while others anticipate -$0.76. Revenue projections similarly show divergence, ranging between $162 million and $177 million.

The company's historical performance data presents a challenging picture. Over the past two years, Daqo New Energy has surpassed earnings expectations in only 38% of reporting periods. While demonstrating stronger performance in revenue estimates with a 63% beat rate, the stock experienced nearly a 3% single-day decline following its last quarterly announcement. The current recovery, with shares gaining 2.79% to reach $26.20, appears vulnerable against this backdrop.

Market Position Amid Industry Consolidation

Despite ongoing industry consolidation pressures, Daqo maintains several competitive advantages:

Should investors sell immediately? Or is it worth buying Daqo New Energy?

• Substantial liquidity with $2.06 billion in cash reserves and zero debt
• An active share repurchase program valued at $100 million
• A significant global market share between 18-20%
• Recognition as a "Deep Value" opportunity with an AAII Grade 'A' rating

Current polysilicon prices remain stable at 53,200 yuan per metric ton, but only cost-efficient producers with technological leadership are positioned to thrive. Daqo's strengths in N-Type polysilicon production, coupled with industry-low production costs of $5.12 per kilogram, provide crucial advantages in this competitive landscape.

Second Quarter Performance Casts Shadow

The company continues to grapple with the aftermath of a difficult second quarter, which saw revenue decline by 65.8% to $75.2 million and gross margins turn negative at -108.3%. The upcoming earnings report will indicate whether management has successfully engineered a turnaround or if the downward trajectory persists. Trading at $26.20, Daqo shares currently sit 10.38% below their price from one year ago, underscoring the significance of Monday's financial disclosure.