First Solar (FSLR) AI Stock Analysis

• Market Cap: $24.20B
• Dividend Yield: N/A
• Average Volume (3M): 2.08M
• Price to Earnings (P/E): 17.7
• Beta (1Y): 0.95
• Revenue Growth: 31.16%
• EPS Growth: 11.97%
• Country: US
• Employees: 8,100
• Sector: Technology
• Sector Strength: 88
• Industry: Solar
• EPS (TTM): 4.24
• Shares Outstanding: 107,308,140
• 10 Day Avg. Volume: 2,199,648
• 30 Day Avg. Volume: 2,084,378
• PEG Ratio: 0.26
• Price to Book (P/B): 2.36
• Price to Sales (P/S): 4.48
• P/FCF Ratio: -61.22
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 4.86
• Enterprise Value/Gross Profit: 12.14
• Enterprise Value/Ebitda: 12.08
• 1Y Price Target: $274.83
• Price Target Upside: 19.21% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: $245.00 ▲(6.27% Upside)

The score is led by strong profitability and a conservative balance sheet, but is held back by weak free cash flow dynamics. Technical indicators also point to bearish momentum (below key moving averages and negative MACD). Valuation appears reasonable at a 17.2 P/E, while the earnings call was mixed with record sales and cash strength offset by major contract terminations, supply chain issues, and warranty/underutilization impacts.

Positive Factors

Profitability & Margins

Sustained high gross and net margins alongside double-digit TTM revenue growth indicate structural cost advantages and pricing power in utility-scale PV markets. This margin profile supports long-term reinvestment capacity and resilience to moderate ASP pressure over the next several quarters.

Conservative Capital Structure

Low leverage and a high equity ratio provide balance sheet flexibility for funding project development, capital expansion, or weathering project delays. Strong ROE demonstrates efficient capital deployment, reducing refinancing risk and supporting strategic investments over a multiquarter horizon.

Defensible Intellectual Property

USPTO refusal to institute IPRs on key tunnel-oxide passivated contact patents strengthens First Solar's technological moat. Firm patent enforcement reduces competitor encroachment risk and preserves differentiation in module efficiency and system economics over the medium term.

Negative Factors

Weak Free Cash Flow Conversion

Sharp decline in free cash flow and low operating cash conversion of earnings indicate fragility in turning profits into distributable cash. This constrains capacity to self-fund large project builds or absorb unexpected costs, increasing dependence on external financing over coming quarters.

Contract Terminations & Volume Volatility

Large debookings from a single counterparty highlight concentration and execution risk in project pipelines. Such cancellations create underutilization, revenue timing uncertainty, and potential idle capacity costs that can pressure margins and planning for the next several quarters.

Warranty & Manufacturing Quality Risk

Material warranty exposures tied to manufacturing issues signal product quality and process risks. Expected future warranty costs can erode gross margins and necessitate higher reserve levels or rework spending, creating recurring operating cost pressure until manufacturing defects are fully remediated.

First Solar Business Overview & Revenue Model

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.

How the Company Makes Money

First Solar generates revenue primarily through the sale of its solar modules and the development of solar power projects. The company earns money from two main segments: Manufacturing and Project Development. In the Manufacturing segment, First Solar sells its thin-film solar panels to utility companies, commercial customers, and distributors. The Project Development segment includes revenue from the construction and operation of utility-scale solar power plants, where the company often partners with other energy firms to finance and develop projects. Additionally, First Solar benefits from long-term power purchase agreements (PPAs) that provide predictable revenue streams over the lifespan of the solar installations. Significant partnerships with energy providers, government incentives, and tax credits also play a crucial role in enhancing the company's profitability.

First Solar Financial Statement Overview

Summary

Strong profitability and growth (TTM revenue +16.28%, gross margin 42.76%, net margin 28.95%) and a conservative balance sheet (debt-to-equity 0.12, equity ratio 66.98%) support a high score. This is tempered by weaker cash conversion and sharply negative free cash flow growth (-165.19%) plus a low operating cash flow to net income ratio (0.10).

Income Statement

First Solar has demonstrated strong revenue growth with a 16.28% increase in TTM, supported by robust gross and net profit margins of 42.76% and 28.95% respectively. The company maintains a healthy EBIT margin of 31.81% and an EBITDA margin of 40.12%, indicating efficient operational management. However, the slight decline in gross profit margin from the previous year suggests potential cost pressures.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.12, indicating conservative leverage. Return on equity is strong at 16.61%, showcasing effective use of equity capital. The equity ratio stands at 66.98%, highlighting a stable asset base. However, the increase in total debt from the previous year warrants monitoring.

Cash Flow

Operating cash flow is robust, but the free cash flow has declined significantly, resulting in a negative free cash flow growth rate of -165.19%. The operating cash flow to net income ratio is low at 0.10, suggesting potential cash flow management issues. The negative free cash flow to net income ratio indicates challenges in converting earnings into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.05B	4.21B	3.32B	2.62B	2.92B	2.71B
Gross Profit	2.02B	1.86B	1.30B	69.86M	729.95M	680.67M
EBITDA	2.03B	1.87B	1.21B	290.55M	845.17M	550.15M
Net Income	1.40B	1.29B	830.78M	-44.17M	468.69M	398.36M
Balance Sheet
Total Assets	13.46B	12.12B	10.37B	8.25B	7.41B	7.11B
Cash, Cash Equivalents and Short-Term Investments	2.04B	1.79B	2.10B	2.58B	1.83B	1.75B
Total Debt	891.91M	718.80M	624.39M	234.13M	398.59M	482.27M
Total Liabilities	4.44B	4.15B	3.68B	2.42B	1.45B	1.59B
Stockholders Equity	9.02B	7.98B	6.69B	5.84B	5.96B	5.52B
Cash Flow
Free Cash Flow	614.52M	-308.08M	-784.51M	-30.24M	-302.73M	-379.51M
Operating Cash Flow	1.63B	1.22B	602.26M	873.37M	237.56M	37.12M
Investing Cash Flow	-799.32M	-1.56B	-472.79M	-1.19B	-99.04M	-131.23M
Financing Cash Flow	155.17M	24.85M	336.85M	309.39M	40.55M	-82.59M

First Solar Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 230.55
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSLR, the sentiment is Negative. The current price of 230.55 is below the 20-day moving average (MA) of 242.25, below the 50-day MA of 254.31, and above the 200-day MA of 206.45, indicating a neutral trend. The MACD of -6.95 indicates Positive momentum. The RSI at 41.71 is Neutral, neither overbought nor oversold. The STOCH value of 33.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FSLR.

First Solar Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXT	80 Outperform	$17.37B	29.53	33.29%	―	20.37%	3.46%
FSLR	69 Neutral	$24.20B	17.70	16.86%	―	31.16%	11.97%
ENPH	66 Neutral	$4.84B	25.24	20.31%	―	20.97%	226.98%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ARRY	61 Neutral	$1.73B	-18.28	-7.75%	―	35.75%	37.97%
SEDG	49 Neutral	$1.85B	-3.17	-78.09%	―	-0.14%	66.71%
RUN	49 Neutral	$4.41B	-1.63	-59.68%	―	13.79%	-527.48%