First Solar
FSLR
$205.31
-3.15%
First Solar designs and manufactures solar photovoltaic panels, modules, and systems for utility-scale projects using cadmium telluride thin-film technology. As the world's largest thin-film solar module manufacturer with production facilities in Vietnam, Malaysia, the United States, and India, it holds a distinct competitive position in the solar industry. The current investor narrative centers on the company's strong revenue growth and profitability, tempered by near-term policy headwinds and a recent stock pullback from its 52-week high. Recent analyst actions show mixed sentiment, with some firms upgrading while others downgrade, reflecting debate over the impact of trade policies and the pace of solar adoption.…
FSLR
First Solar
$205.31
Related headlines
Investment Opinion: Should I buy FSLR Today?
Rating: Buy. Thesis: First Solar offers a rare combination of high growth (23.6% YoY revenue), industry-leading margins (33.2% net), and a deeply discounted forward P/E of 9.0x, making it an attractive value in the solar space. The consensus analyst rating is Buy with an average target of $254.26, implying 20% upside.
Supporting Evidence: The forward P/E of 9.0x is a 59% discount to the solar industry average of 22x. Revenue is growing at 23.6% YoY, and net margin of 33.2% is among the highest in the sector. The company has a pristine balance sheet with debt-to-equity of 0.05 and a current ratio of 2.67. Free cash flow TTM is $1.668B, demonstrating strong cash generation despite a negative quarter. The PEG ratio of 1.01 suggests the stock is fairly valued relative to its growth rate.
Risks & Conditions: The biggest risks are policy headwinds and potential margin compression. If revenue growth decelerates below 15% or net margin falls below 25%, the thesis would weaken. Conversely, if the forward P/E compresses below 7x, it would signal a buying opportunity. Overall, FSLR appears undervalued relative to its growth and profitability, offering a favorable risk/reward for long-term investors.
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FSLR 12-Month Price Forecast
First Solar's strong fundamentals and attractive valuation support a bullish stance, but near-term policy risks and recent price weakness warrant medium confidence. The base case of 20% upside to $254 is most likely, driven by continued execution. If policy headwinds fade, the bull case of $280-$330 becomes more probable. Key factors to watch are Q2 2026 earnings (due late July) and any trade policy announcements. A downgrade to neutral would occur if revenue growth falls below 15% or 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 $254.25 and implied upside of +23.8% versus the current price.
Average Target
$254.25
0 analysts
Implied Upside
+23.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$150 - $330
Analyst target range
First Solar is covered by 28 analysts, with a consensus recommendation of Buy (mean score 2.11 on a 1-5 scale where 1 is Strong Buy). The average price target is $254.26, implying 20.0% upside from the current price of $211.99. The distribution shows a bullish tilt, with recent upgrades from Deutsche Bank (Hold to Buy) and GLJ Research (Hold to Buy), though Truist Securities downgraded from Buy to Hold. The target range spans from $150.00 (low) to $330.00 (high). The high target of $330 assumes successful execution on capacity expansion and favorable policy tailwinds, while the low target of $150 prices in margin compression from competition or adverse trade policies. The wide spread ($180) indicates high uncertainty, but the average target still offers a compelling risk/reward. Recent institutional ratings show a mix of Overweight, Positive, and Buy actions, suggesting analysts see the pullback as an opportunity.
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Bulls vs Bears: FSLR Investment Factors
First Solar presents a compelling bull case with strong revenue growth (23.6% YoY), industry-leading margins (33.2% net), and a forward P/E of 9.0x that is deeply discounted to peers and history. The bear case centers on near-term price weakness (down 22.7% YTD), policy uncertainty, and negative quarterly free cash flow. Currently, the bull case has stronger evidence given the company's financial strength and attractive valuation, but the key tension is whether policy headwinds will derail the growth trajectory. If the company can maintain its margin expansion and revenue acceleration, the stock offers significant upside; if trade policies or competition compress margins, the stock could test its 52-week low of $171.86.
Bullish
- Strong Revenue Growth: Q1 2026 revenue of $1.044B grew 23.6% YoY, and TTM revenue is ~$5.4B. This accelerating growth is driven by robust demand for utility-scale solar modules and capacity expansion.
- High Profitability & Margins: Net margin of 33.2% and gross margin of 46.5% in Q1 2026 are industry-leading. Operating margin of 33.8% demonstrates strong cost control and pricing power.
- Undervalued on Forward P/E: Forward P/E of 9.0x is a 59% discount to the solar industry average of ~22x, and below its own 5-year historical range (12x-136x). This suggests significant upside if earnings materialize.
- Pristine Balance Sheet: Debt-to-equity of 0.05 and current ratio of 2.67 indicate minimal leverage and ample liquidity. This financial strength provides resilience against industry downturns.
Bearish
- Recent Price Decline: Stock is down 22.7% YTD and 16.8% in the past month, underperforming SPY by 17.1% in 1-month relative strength. This reflects near-term policy headwinds and profit-taking.
- Policy & Trade Risks: Solar industry faces potential tariff changes and policy uncertainty. Recent news highlights 'near-term policy headwinds' that could impact demand and margins.
- Negative Free Cash Flow: Q1 2026 free cash flow was -$333M due to working capital build. While TTM FCF is positive at $1.668B, the quarterly negative FCF raises concerns about cash conversion.
- High Valuation on Trailing P/E: Trailing P/E of 18.3x, while below industry average, is still elevated relative to the forward P/E. If earnings growth disappoints, the stock could re-rate lower.
FSLR Technical Analysis
First Solar is in a corrective phase within a broader uptrend, with the stock down 22.7% year-to-date but up 22.2% over the past year. The current price of $211.99 sits at 66% of its 52-week range ($171.86–$320.95), indicating a pullback from the highs but still above the low. This positioning suggests the stock is in a consolidation zone, potentially offering a value entry if the uptrend resumes, but also risking further downside if support breaks. Short-term momentum is decisively bearish, with a 1-month decline of 16.8% and a 3-month gain of 11.3%, showing a sharp reversal from the May–June rally. The 1-month relative strength versus SPY is -17.1%, confirming underperformance, while the 3-month relative strength is +6.6%, indicating the longer-term trend still favors FSLR. This divergence suggests the recent selloff may be a mean-reverting pullback within a larger uptrend, but the speed of decline warrants caution. Key support lies at the 52-week low of $171.86, a break of which would signal a potential trend reversal and target lower levels. Resistance is at the 52-week high of $320.95; a breakout above would confirm resumption of the uptrend. With a beta of 1.73, FSLR is 73% more volatile than the market, amplifying both upside and downside moves, which is critical for risk management.
Beta
1.73
1.73x market volatility
Max Drawdown
-35.5%
Largest decline past year
52-Week Range
$172-$321
Price range past year
Annual Return
+16.8%
Cumulative gain past year
| Period | FSLR Return | S&P 500 |
|---|---|---|
| 1m | -20.3% | -0.6% |
| 3m | +10.0% | +5.4% |
| 6m | -15.8% | +8.3% |
| 1y | +16.8% | +18.3% |
| ytd | -25.2% | +8.8% |
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FSLR Fundamental Analysis
First Solar's revenue trajectory is robust, with Q1 2026 revenue of $1.044 billion, up 23.6% year-over-year, and a trailing twelve-month revenue of approximately $5.4 billion. Growth has been accelerating, with Q4 2025 revenue of $1.683 billion and Q3 2025 revenue of $1.595 billion, indicating strong demand for utility-scale solar modules. The solar module segment is the sole revenue driver, and the company's expansion of production capacity supports continued growth. The company is highly profitable, with Q1 2026 net income of $346.6 million and a net margin of 33.2%. Gross margin improved to 46.5% in Q1 2026 from 39.5% in Q4 2025, reflecting better cost management and pricing power. Operating margin of 33.8% is strong, and the company has consistently generated positive net income over the past eight quarters, with EPS of $3.23 in Q1 2026. First Solar has a pristine balance sheet with a debt-to-equity ratio of just 0.05 and a current ratio of 2.67, indicating ample liquidity. Free cash flow was negative in Q1 2026 (-$333 million) due to working capital build, but trailing twelve-month free cash flow is $1.668 billion, demonstrating strong cash generation. ROE of 16.0% is solid, and the company has no dividend, reinvesting all earnings into growth.
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?
Since net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 18.3x, while the forward P/E is 9.0x, implying the market expects significant earnings growth. The gap between trailing and forward P/E suggests a forward earnings growth rate of over 100%, which is supported by analyst estimates of $29.22 EPS for the current year. Compared to the solar industry average P/E of approximately 22x, First Solar's trailing P/E of 18.3x is a 17% discount, but the forward P/E of 9.0x is a 59% discount, indicating the market is pricing in substantial growth. This discount may be justified by the company's dominant position in thin-film technology and strong profitability, but it also reflects policy risks. Historically, First Solar's trailing P/E has ranged from 12x to 136x over the past five years. The current 18.3x is near the lower end of that range, suggesting the stock is undervalued relative to its own history, provided earnings growth materializes. The P/B ratio of 2.9x is also below the 5-year average of 3.5x, reinforcing the value proposition.
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 & Operational Risks: First Solar's debt-to-equity of 0.05 is negligible, but the negative free cash flow of -$333M in Q1 2026 is a concern, though TTM FCF of $1.668B shows overall cash generation. The company's net margin of 33.2% is high but could compress if input costs rise or pricing power weakens. Revenue concentration in solar modules (100% of revenue) means any disruption in utility-scale project demand would directly impact earnings. The trailing P/E of 18.3x, while below industry average, still implies market expectations of continued growth; a miss could lead to multiple contraction.
Market & Competitive Risks: With a beta of 1.73, FSLR is highly sensitive to market moves and macro factors like interest rates and trade policy. The solar industry is competitive, with pressure from Chinese manufacturers and alternative technologies. The stock's 22.7% YTD decline reflects these concerns, and the wide analyst target range ($150-$330) indicates high uncertainty. Recent news highlights policy headwinds that could dampen near-term sentiment. If the broader market rotates away from growth stocks, FSLR could underperform further.
Worst-Case Scenario: A combination of adverse trade policies, margin compression, and a broader market downturn could drive the stock to its 52-week low of $171.86, representing a 19% downside from the current price of $211.99. In a severe scenario, the analyst low target of $150 implies a 29% loss. The historical max drawdown of -35.1% suggests that in a worst-case, the stock could fall to around $137.60, a 35% decline from current levels.
FAQ
The key risks are: 1) Policy risk: Changes in U.S. solar tariffs or tax credits could impact demand and margins. 2) Competitive risk: Pressure from Chinese manufacturers could erode pricing power. 3) Execution risk: The company must successfully ramp new production capacity to meet growth targets. 4) Macro risk: With a beta of 1.73, the stock is highly sensitive to market downturns and interest rate changes. The most severe risk is a combination of adverse policies and margin compression, which could drive the stock to the analyst low target of $150, a 29% downside from current levels.
The 12-month forecast is moderately bullish. The base case (45% probability) sees the stock trading between $230 and $280, driven by steady execution and 20% revenue growth. The bull case (30% probability) targets $280-$330, assuming favorable policies and margin expansion. The bear case (25% probability) sees $150-$200 if trade headwinds intensify. The most likely scenario is the base case, with the stock reaching the analyst average target of $254.26, implying 20% upside. Key assumptions include stable trade policies and gross margins above 40%.
FSLR appears undervalued based on forward earnings. The forward P/E of 9.0x is well below the solar industry average of 22x and the stock's own 5-year historical range of 12x-136x. The trailing P/E of 18.3x is also below the industry average, though not as extreme. The P/B ratio of 2.9x is below the 5-year average of 3.5x, further supporting undervaluation. The market is pricing in significant earnings growth (forward EPS of $29.22), but if achieved, the stock offers substantial upside. The PEG ratio of 1.01 suggests the stock is fairly valued relative to its growth rate.
Yes, FSLR appears to be a good buy for long-term investors given its strong fundamentals and attractive valuation. The stock trades at a forward P/E of 9.0x, a 59% discount to the solar industry average, while growing revenue at 23.6% YoY with a net margin of 33.2%. Analyst consensus is Buy with an average target of $254.26, implying 20% upside. However, the stock has high volatility (beta 1.73) and faces near-term policy risks, so it is best suited for investors with a 12-month or longer horizon who can tolerate potential drawdowns to the 52-week low of $171.86.
FSLR is better suited for long-term investment (12+ months) due to its high volatility (beta 1.73) and sensitivity to policy news. Short-term trading is risky given the stock's 16.8% decline in the past month and wide price swings. The company's strong fundamentals and attractive valuation support a long-term hold, with the potential for significant upside as earnings grow. The lack of a dividend means returns come entirely from price appreciation, which aligns with a growth-oriented long-term strategy. A minimum holding period of 12 months is recommended to allow catalysts to materialize.
