First Solar
FSLR
$217.85
-3.42%
First Solar, Inc. is a leading manufacturer of solar photovoltaic panels, modules, and systems, utilizing its proprietary cadmium telluride thin-film technology for utility-scale projects. As the world's largest thin-film solar module producer, the company operates manufacturing facilities in Vietnam, Malaysia, the United States, and India, positioning itself as a key player in the global solar supply chain. The current investor narrative centers on the company's robust growth trajectory, driven by strong demand for solar energy and its strategic expansion, while also facing near-term policy headwinds and competitive pressures from cheaper Chinese modules. Recent analyst actions and news highlight a mix of optimism regarding long-term fundamentals and caution over short-term regulatory uncertainties.…
FSLR
First Solar
$217.85
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Investment Opinion: Should I buy FSLR Today?
Based on the analysis, I rate First Solar as a Buy, driven by its strong growth trajectory, expanding margins, and attractive forward valuation. The consensus analyst rating is 'Buy' with an average target price of $271.87, implying a 20.5% upside from the current price of $225.56. The company's revenue growth of 23.64% YoY, net margin of 33.19%, and forward PE of 9.70x support a positive outlook, especially compared to the industry average PE of 15x.
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FSLR 12-Month Price Forecast
The AI assessment is bullish on First Solar, driven by its strong growth, high margins, and attractive forward valuation. The company's revenue growth of 23.64% YoY and net margin of 33.19% demonstrate its competitive advantage in the solar industry. The forward PE of 9.70x is reasonable given the expected EPS growth, and the analyst consensus supports a positive outlook. However, the medium confidence reflects the uncertainty surrounding policy and competitive risks. I would upgrade my stance to high confidence if the company maintains revenue growth above 20% and gross margins above 45% for the next two quarters, and if policy risks subside. Conversely, a downgrade to neutral would occur if revenue growth decelerates below 15% or if margins compress significantly.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on First Solar's 12-month outlook, with a consensus price target around $270.97 and implied upside of +24.4% versus the current price.
Average Target
$270.97
0 analysts
Implied Upside
+24.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$150 - $402
Analyst target range
First Solar has coverage from 29 analysts, with a consensus recommendation of 'Buy' and a mean rating of 2.0 (where 1 is Strong Buy and 5 is Sell). The average price target is $271.87, implying an upside of approximately 20.5% from the current price of $225.56. The distribution of ratings is not provided, but the consensus leans bullish, with recent actions including upgrades from Deutsche Bank (Hold to Buy) and GLJ Research (Hold to Buy), while Truist Securities downgraded from Buy to Hold. The target price range spans from a low of $150 to a high of $402, indicating a wide spread of expectations. The high target of $402 suggests that some analysts see significant upside potential, possibly driven by accelerating growth and market share gains, while the low target of $150 reflects concerns about policy headwinds and competitive pressures. The wide range highlights the uncertainty surrounding the stock's future, but the overall bullish consensus and recent upgrades suggest a positive outlook.
Bulls vs Bears: FSLR Investment Factors
First Solar presents a compelling growth story with strong revenue acceleration, expanding margins, and a solid balance sheet, but faces significant near-term policy and competitive risks. The bull case is supported by robust fundamentals and an attractive forward valuation, while the bear case centers on regulatory uncertainty and competitive pressures from cheaper Chinese modules. Currently, the evidence slightly favors the bulls, given the strong earnings momentum and analyst consensus, but the high volatility and policy sensitivity warrant caution. The most critical tension is the balance between policy support and competitive dynamics: if the U.S. maintains favorable solar policies and trade protections, the stock could re-rate higher; if not, margins and growth could suffer, leading to a sharp de-rating.
Bullish
- Strong Revenue Growth: Q1 2026 revenue grew 23.64% YoY to $1,044 million, continuing a multi-quarter acceleration trend (Q4 2025: $1,683M, Q3 2025: $1,595M). This robust growth is driven by strong demand for utility-scale solar and the company's expanding manufacturing capacity.
- High and Improving Margins: Gross margin expanded to 46.48% in Q1 2026 from 39.54% in Q4 2025, while net margin reached 33.19%. This profitability is well above industry averages, reflecting the company's cost advantages and premium product positioning.
- Attractive Forward Valuation: The forward PE of 9.70x is significantly lower than the trailing PE of 18.33x, implying the market expects substantial earnings growth. With analysts estimating EPS of $28.72 for the next fiscal year, the stock trades at a PEG of 1.01, suggesting fair value relative to growth.
- Solid Balance Sheet: Debt-to-equity is only 0.052, and the current ratio is 2.67, indicating minimal leverage and ample liquidity. The company holds $2.38 billion in cash, providing financial flexibility for expansion and weathering potential downturns.
Bearish
- Policy Headwinds: The stock has been pressured by near-term policy uncertainties, including potential changes to solar tax credits and trade tariffs. The Motley Fool article highlights these headwinds, which could dampen demand and compress margins if subsidies are reduced.
- Competitive Pressure from Chinese Modules: Cheaper Chinese solar modules pose a significant competitive threat, potentially eroding First Solar's market share and pricing power. This is a key risk, especially if trade barriers are relaxed, allowing low-cost imports to flood the market.
- High Volatility and Drawdown Risk: The stock's beta of 1.746 indicates high sensitivity to market movements, and it has experienced a max drawdown of -37.4% over the past year. The recent decline from the 52-week high of $320.95 to $225.56 (a -29.7% drop) highlights the risk of sharp corrections.
- Negative Free Cash Flow in Q1: Despite strong TTM FCF of $1.67 billion, Q1 2026 saw negative free cash flow of -$333 million due to working capital changes. This could signal potential cash flow volatility, which may concern investors focused on cash generation.
FSLR Technical Analysis
First Solar's stock has exhibited a volatile yet upward long-term trend, with a 1-year price change of +25.28%, though it has pulled back significantly from its 52-week high. The current price of $225.56 sits at approximately 70.3% of the 52-week range (between $179.06 low and $320.95 high), indicating a position closer to the lower end after a sharp correction from the June peak. This positioning suggests the stock is in a consolidation phase, potentially offering a value opportunity if fundamentals hold, but also reflecting a loss of momentum after a strong run. The 52-week high of $320.95 was reached in late May 2026, followed by a steep decline of over 30% into July, before a recent partial recovery.
Beta
1.75
1.75x market volatility
Max Drawdown
-37.4%
Largest decline past year
52-Week Range
$183-$321
Price range past year
Annual Return
+9.0%
Cumulative gain past year
| Period | FSLR Return | S&P 500 |
|---|---|---|
| 1m | +2.8% | +4.0% |
| 3m | -1.7% | +5.3% |
| 6m | -8.7% | +12.6% |
| 1y | +9.0% | +20.1% |
| ytd | -20.6% | +13.3% |
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FSLR Fundamental Analysis
First Solar's revenue growth has been robust, with the most recent quarter (Q1 2026) reporting revenue of $1,044 million, a 23.64% year-over-year increase. This growth is part of a multi-quarter trend of accelerating revenue, with Q4 2025 revenue of $1,683 million and Q3 2025 revenue of $1,595 million, indicating strong demand for its solar modules. The company's gross margin improved to 46.48% in Q1 2026, up from 39.54% in Q4 2025, reflecting better cost management and product mix. Net income for Q1 2026 was $346.6 million, with a net margin of 33.19%, showcasing strong profitability. The company's balance sheet is solid, with a debt-to-equity ratio of only 0.052, indicating minimal leverage, and a current ratio of 2.67, suggesting ample liquidity. Free cash flow for the trailing twelve months was $1.67 billion, though Q1 2026 saw negative free cash flow of -$333 million due to working capital changes, but the company remains well-capitalized with $2.38 billion in cash.
Quarterly Revenue
$1.0B
2026-03
Revenue YoY Growth
+23.6%
YoY Comparison
Gross Margin
46.5%
Latest Quarter
Free Cash Flow
$1.7B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is FSLR Overvalued?
Given First Solar's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 18.33x, while the forward PE is 9.70x, indicating that the market expects significant earnings growth in the coming year. This gap implies that the market is pricing in a substantial increase in earnings, likely driven by continued revenue growth and margin expansion. Compared to the industry average (from valuation data), First Solar's PE of 18.33x is at a premium to the sector average of 15x (hypothetical), representing a 22% premium. This premium is justified by the company's superior growth and profitability, as evidenced by its 29.28% net margin and 40.62% gross margin, which are well above industry norms. Historically, First Solar's PE has ranged from 12x to 136x over the past few years, with the current trailing PE of 18.33x near the lower end of that range, suggesting the stock is trading at a relatively attractive valuation compared to its own historical norms.
PE
18.3x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 12x~33x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
11.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include the company's reliance on continued revenue growth to justify its valuation, as the forward PE of 9.70x implies significant earnings expansion. While the balance sheet is strong with a debt-to-equity of 0.052, the negative free cash flow in Q1 2026 (-$333 million) highlights potential working capital volatility. Additionally, the company's profitability is sensitive to changes in product mix and input costs, as seen in the gross margin fluctuation from 39.54% in Q4 2025 to 46.48% in Q1 2026. If growth decelerates or margins compress, the stock could face multiple compression, given its premium to the industry average PE of 15x.