First Solar, Inc. (FSLR) | Investment Case

1. Company Snapshot

1.a. Company Description

First Solar, Inc.provides photovoltaic (PV) solar energy solutions in the United State, Japan, France, Canada, India, Australia, and internationally.The company designs, manufactures, and sells cadmium telluride solar modules that converts sunlight into electricity.

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.

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1.b. Last Insights on FSLR

First Solar's recent performance was driven by several positive factors. The company lifted its 2025 sales outlook after beating Q2 earnings and revenue estimates, fueling investor optimism. Additionally, it emerged as a beneficiary of recent U.S. regulatory and political changes, including preserved and expanded tax credits, protection from Chinese competition, and robust mid-term demand driven by legislative support. A new 3.7 GW U.S. plant will enable full domestic production, reducing reliance on foreign suppliers and enhancing margins.

1.c. Company Highlights

Last Price	261.77
Change Percentage	1.75%
Open	258
Previous Close	257.28
Market Cap ( Millions)	28090
Volume	673364
Year High	281.55
Year Low	116.56
M A 50	245.69
M A 200	183.2

FCF Yield	2.19%
Dividend Yield	0.00%
ROE	16.61%
Debt / Equity	9.89%
Net Debt / EBIDTA	-54.13%
Price To Book	3.11
Price Earnings Ratio	20.0
Price To FCF	45.6
Price To sales	5.55
EV / EBITDA	13.24

2. Disappointing EPS Misses Expectations Amidst Operational Headwinds

The company's financial performance was marked by a revenue increase to $1.6 billion, up from the previous quarter, but a gross margin contraction to 38% from 46%. Earnings per share (EPS) came in at $4.24, missing analyst estimates of $4.32. The decline in gross margin was primarily attributed to a lower mix of modules sold from U.S. manufacturing facilities. As Mark Widmar noted, "We've resolved manufacturing issues affecting select Series 7 modules produced prior to 2025, with estimated losses ranging from $50 million to $90 million."

Publication Date: Nov -01

                                    📋 Highlights
                                    Gross Bookings & Contract Terminations:
                                                Secured 2.7 GW at $0.309/W, including 0.4 GW of Series 7 modules at $0.29/W; terminated 6.6 GW with BP affiliates at $0.294/W.
Backlog & Pipeline Strength:
                                                Contracted backlog of 54.5 GW (valued at $16.4B) and total pipeline of 79.2 GW, with 4.1 GW in mid- to late-stage conditional bookings.
Manufacturing & Capacity Expansion:
                                                Louisiana facility initiated production, planned 3.7 GW U.S. finishing facility to start in late 2026; $204M in Q3 capex driven by Louisiana.
Financials & Margin Pressure:
                                                Q3 net sales rose to $1.6B (+$500M QoQ), but gross margin fell to 38% (vs. 46% prior) due to lower U.S. module sales mix; $65M warranty liability for Series 7 issues.
Balance Sheet & Guidance:
                                                $2B cash reserves, $775M tax credit transfers, and 2025 net sales guidance reduced to $4.95B–$5.20B due to BP termination and glass supply disruptions.

                                

Operational Challenges and Contract Terminations

The company faced significant operational challenges, including supply chain disruptions and production issues. The termination of 6.6 gigawatts of bookings by BP affiliates had a substantial impact, contributing to a total debooking of 8.1 gigawatts for the year. The company has taken legal action against BP Solar Holding LLC and its affiliate Lightsource Renewable Energy Trading for failing to cure multiple breaches of contractual obligations.

Guidance Revision and Future Outlook

The company revised its 2025 guidance ranges downward due to third-party glass supply chain disruptions and the BP contract terminations. Net sales guidance is now projected at $4.95 billion to $5.20 billion, with an operating margin of approximately 32%. Analysts estimate revenue growth at 17.3% for next year. The company's current valuation metrics, including a P/E Ratio of 20.45 and EV/EBITDA of 15.44, indicate a premium valuation.

Valuation and Growth Prospects

With a strong contracted backlog of 54.5 gigawatts and a growing pipeline of mid- to late-stage booking opportunities, the company is poised for growth. The initiation of integrated production runs at the Louisiana factory and plans for a new 3.7 gigawatts U.S. production facility are expected to drive future growth. However, the current valuation multiples suggest that the market has already priced in a significant portion of the company's growth prospects.

3. NewsRoom

Market Today: Deal Talks, Retail Wins, AI Chips, and Crypto Volatility

Dec -02

Source: gurufocus.com

The Coming Energy Shock: How AI Data Centers will Reshape Power Needs

Dec -01

Source: zacks.com

Advisors Asset Management Inc. Has $1.11 Million Stock Position in First Solar, Inc. $FSLR

Dec -01

Source: defenseworld.net

First Solar Stock Flashing Intriguing Contrarian Signal

Nov -28

Source: forbes.com

FSLR vs. CSIQ: U.S. Thin-Film Leader or Global Volume Player?

Nov -26

Source: zacks.com

First Solar Inaugurates New $1.1 Billion AI-Enabled Louisiana Manufacturing Facility

Nov -21

Source: businesswire.com

Bank Julius Baer & Co. Ltd Zurich Sells 4,074 Shares of First Solar, Inc. $FSLR

Nov -21

Source: defenseworld.net

NVDA: Nvidia Sends Chip Stocks Soaring After Record Q3 Results

Nov -20

Source: gurufocus.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.44%)

6. Segments

Modules

Expected Growth: 10.43%

First Solar's 10.43% growth is driven by increasing demand for renewable energy, declining module costs, and strategic partnerships. The company's Series 6 module, with higher efficiency and lower production costs, is gaining traction. Additionally, First Solar's strong project pipeline, including utility-scale and commercial projects, contributes to its growth momentum.

Other

Expected Growth: 11.27%

First Solar's 11.27% growth driven by increasing demand for renewable energy, expansion into new markets, and improved module efficiency. Government incentives and declining costs also contribute to growth. The company's strategic partnerships, such as the one with Microsoft, further boost its prospects.

7. Detailed Products

Solar Modules

First Solar's solar modules are designed to convert sunlight into electricity, offering high efficiency and reliability for various applications.

Series 6 Solar Panels

Series 6 solar panels are designed for high-efficiency energy production, featuring a larger form factor and higher power output.

Series 4 Solar Panels

Series 4 solar panels offer high efficiency and reliability, suitable for a wide range of applications.

Energy Storage Solutions

First Solar's energy storage solutions integrate with solar power systems to provide a stable and reliable energy supply.

Operations and Maintenance (O&M) Services

First Solar's O&M services ensure optimal performance and longevity of solar power systems.

Solar Power Plant Design and Engineering

First Solar's design and engineering services provide customized solutions for solar power plants.

8. First Solar, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for First Solar, Inc. is medium due to the presence of alternative energy sources such as wind power, hydro power, and fossil fuels. However, the increasing demand for renewable energy and government incentives for solar energy reduce the threat of substitutes.

Bargaining Power Of Customers

The bargaining power of customers for First Solar, Inc. is low due to the lack of concentration in the customer base and the high switching costs associated with changing solar panel providers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for First Solar, Inc. is medium due to the presence of a few large suppliers of polysilicon and other raw materials. However, the company's vertical integration and long-term contracts with suppliers reduce the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants for First Solar, Inc. is high due to the low barriers to entry and the increasing demand for solar energy. However, the company's established brand and technology leadership reduce the threat of new entrants.

Intensity Of Rivalry

The intensity of rivalry for First Solar, Inc. is high due to the presence of several established competitors and the increasing competition from new entrants. The company's focus on innovation and cost reduction helps to mitigate the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	8.54%
Debt Cost	3.95%
Equity Weight	91.46%
Equity Cost	10.79%
WACC	10.21%
Leverage	9.34%

11. Quality Control: First Solar, Inc. passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Baker Hughes

A-Score: 5.9/10

Value: 4.8

Growth: 4.3

Quality: 6.2

Yield: 5.0

Momentum: 8.0

Volatility: 7.0

1-Year Total Return ->

Hess

A-Score: 5.7/10

Value: 3.6

Growth: 7.1

Quality: 6.6

Yield: 2.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

Oxy

A-Score: 5.0/10

Value: 6.9

Growth: 5.2

Quality: 5.1

Yield: 3.0

Momentum: 3.0

Volatility: 7.0

1-Year Total Return ->

Schlumberger

A-Score: 5.0/10

Value: 5.5

Growth: 4.9

Quality: 6.0

Yield: 5.0

Momentum: 2.0

Volatility: 6.7

1-Year Total Return ->

First Solar

A-Score: 4.7/10

Value: 4.6

Growth: 7.4

Quality: 7.5

Yield: 0.0

Momentum: 6.0

Volatility: 2.7

1-Year Total Return ->

Halliburton

A-Score: 4.5/10

Value: 5.5

Growth: 5.2

Quality: 4.9

Yield: 4.0

Momentum: 2.0

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

39.82%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

10.21%

First Solar, Inc. - US3364331070

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FSLR

1.c. Company Highlights

Expensive

Better Quality

Weak Momentum

Earnings Beats

Revenues Beats

Lower Yield

Strong Momentum

Earnings Miss

Revenues Miss

Medium Volatility

Higher Growth

Stable Momentum

2. Disappointing EPS Misses Expectations Amidst Operational Headwinds

Operational Challenges and Contract Terminations

Guidance Revision and Future Outlook

Valuation and Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.44%)

6. Segments

Modules

Expected Growth: 10.43%

Other

Expected Growth: 11.27%

7. Detailed Products

Solar Modules

Series 6 Solar Panels

Series 4 Solar Panels

Energy Storage Solutions

Operations and Maintenance (O&M) Services

Solar Power Plant Design and Engineering

8. First Solar, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: First Solar, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

261.72$

Current Price

261.73$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA