FSLR stock analysis. First Solar financials, stock analysis, investment opportunity

On May 8, 2025 I announced the addition of FLSR stock to my portfolio. Below is the analysis of FSLR stock and the reasons for my picking this stock for my portfolio.

Stock Price (May 9, 2025): $140.25

Market Cap: $14.35B

Q1 Earnings Call Investor Presentation [Q1-25-Earnings-Presentation-Final-Secured.pdf]

2023 Annual Report [First-Solar-2024-Annual-Report-Web-Ready.pdf]

Financial Data Trend [Interactive Analyst Center ™]

Why did First Solar ($FSLR) pique my interest

I have been following even before I started this website in 2020. The stock has seen quite some volatility since then going from $60 all the way to $300 in a short-term peak in May of 2024 to retract to $129 since then.

Source: TradingView

Below is the description of the company.

First Solar, Inc., a solar technology company, provides photovoltaic (PV) solar energy solutions in the United States, France, India, Chile, and internationally. The company manufactures and sells PV solar modules with a thin film semiconductor technology that provides a lower-carbon alternative to conventional crystalline silicon PV solar modules. It also designs, manufactures, and sells cadmium telluride solar modules that converts sunlight into electricity.

The company’s residual business operations include project development activities, operations and maintenance services, and the sale of PV solar power systems to third-party customers. It serves developers and operators of systems, utilities, independent power producers, commercial and industrial companies, and other system owners. The company was formerly known as First Solar Holdings, Inc. and changed its name to First Solar, Inc. in 2006. First Solar, Inc. was founded in 1999 and is headquartered in Tempe, Arizona.

The key reason why the stock piqued my interest is its growth potential vs. its current price which offers a lot of price appreciation momentum. I will explain my reasoning next.

FSLR Financial Overview

First Solar has been growing its Revenues, Gross and Net Profit very well over the past few years

Except for a bit of decline in 2022, the company was growing sales in the past 2 years at 27% rate which resulted in a swing from red Net Profit and EPS to solid profitability.

The increase in profit is sourced both from growing sales but also (what I usually look for and quite like) stronger leverage - the gross income margin and net profit margins. Gross income margin tells us how much money the company saves after it paid for making the product (COGS). This number increased from 25% in 2020-2021 to 44% in 2024. Net income margin tells us how much money is left for investors and reinvesting into the business. This is what EPS is calculated of. The Net Profit margin increased from 15% to 31%. This is important as this means, if company maintains its margins, in future, from every $100 more in sales, about $31 will go to net profit.

Source: MarketWatch

The company also does well in terms of Balance Sheet as it has close to $1 billion in cash and very little debt (relative to assets).

Analyst Forecasts for FSLR Stock

Analysts covering the stock (and there are quite a few of them for FSLR) predict the company will continue growing sales and will reach sales (average prediction) of $6.67 billion by the end of 2027. Net income will continue growing accordingly.

Source: SimplyWallSt

Expected growth in Net Income will mean higher EPS levels which are key for our PE (price-to-earnings) calculation. As you can see, the average EPS predicted for the end of 2027 is $27.927

Source: SimplyWallSt

With such predicted growth, the analysts have predominantly "Buy" rating for FSLR stock:

Source: MarketWatch

FSLR stock Key financial ratings/Stock Value. FSLR stock price predictions

The average target price for FSLR by analysts is $190 [source]. This is represents a 46% upside from the current price of $130.

However, we want to look further than that as personally I have a horizon of 2-3 years.

Taking into consideration the current price, and forecasted EPS for the next 3 years, we get the following forward PE scores. 2024 EPS and PE current, 2025-2027 - forecasted.

	EPS	PE
2024	12.073	10.8
2025	14.891	8.7
2026	23.424	5.5
2027	27.927	4.7

As you can see, at the current price of $130 and EPS of $12, the stock is already trading at a quite low PE of 10.8. But taking the current price and future expected EPS scores, the forward PE drops to 5.5. for 2026 and 4.7 for 2027 which is ridiculously low. We usually expect a growing company to have a PE of 15 to 20 or higher.

At a PE of 20, the company price should go up to $550.

Even taking the low-end EPS predictions that stand at $19, and taking PE of 15 gives us a target price of $285.

Somebody may ask why the company is currently trading at a PE of 10.8 which is quite low. The reasons are several, and you are probably thinking of one already.

First Solar (FSLR) stock has declined in the past year due to a combination of factors, including concerns about tariffs, earnings misses, and manufacturing issues. Specifically, the U.S. tariffs on solar goods, which First Solar had initially brought a case for, have created uncertainty and disrupted the company's revenue projections. Furthermore, the company's earnings and revenue guidance were lowered, leading to a stock price drop. Manufacturing challenges, including warranty issues with the Series 7 modules, have also contributed to the stock's decline.

The uncertainty with tariffs has caused the company to lower guidance for 2025 which obviously having a negative impact.

Source: Q1-25-Earnings-Presentation-Final-Secured.pdf

In general, to summarize, despite there are some headwinds which are causing some investor worries, revisions in guidance, and quite some dispersion in analyst predictions. However, the company does seem to have quite strong momentum which will help it go through tougher times. And the company is already trading at very low values giving a lot of room for appreciation.

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Disclaimer: As usual, trade at your own risk. I own FSLR stock. I do not suggest you should buy any of the stocks I write about. As usual, please do your own due diligence before investing your own money in any of the stocks I write about. The above analysis is quite basic and just gives ideas for further research. A much deeper analysis is required for each stock, including the analysis of operations, debt, etc. I may sell any of the stocks I say I currently own at any moment before it reaches the targets that I set or keep them for even when they reach the target.