Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 4 Jun, 25 | FSLR | Buy | USD 159.75 | USD 168.0 | USD 178.0 | 11 days | Closed |
12.36%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
First Solar, Inc., a solar technology company, provides photovoltaic (PV) solar energy solutions in the United States, France, Japan, 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 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.
Substantial Tax Credit Benefit: First Solar forecasts receiving $1.65 to $1.7 billion in Section 45X tax credits in 2025, significantly supporting profitability.
Strong Sales Backlog: The company holds an expected sales backlog of 66.3 GW, providing long-term revenue assurance
Depleted Net Cash Reserves: The company’s net cash balance dropped from $1.2 billion to $0.4 billion, primarily due to high capital expenditure and lower cash receipts.
Significant Revenue Decline: Net sales declined $0.7 billion quarter-over-quarter, signaling short-term demand pressure or operational limitations.
First Solar faces a material risk from regulatory changes, particularly new tariffs and uncertainty surrounding the monetization and timing of IRA-related tax credits, which could significantly affect cash flows and profitability
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 159.75 | 140.0 | 168.0 | 178.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
First Quarter Financial Performance: First Solar, Inc. reported net sales of $0.8 billion for the first quarter ended March 31, 2025, representing a decrease of $0.7 billion compared to the previous quarter. This decline in sales was primarily attributed to an anticipated seasonal slowdown in the volume of solar modules sold. The company's net income per diluted share also declined to $1.95 from $3.65 in the fourth quarter of 2024, reflecting reduced revenue and profitability for the period.
Cash Position and Capital Investments: The company's net cash balance, calculated as cash and equivalents less debt, stood at $0.4 billion at the end of the first quarter, down significantly from $1.2 billion at the end of 2024. This reduction was mainly due to capital expenditures associated with the construction of a manufacturing facility in Louisiana and a strategic inventory build-up to fulfill anticipated demand in the latter half of 2025.
Revised Guidance Reflecting Tariff Impacts: First Solar revised its full-year 2025 guidance to incorporate the expected financial impact of new tariffs implemented in April 2025. The company now forecasts net sales in the range of $4.5 billion to $5.5 billion, down from its previous estimate of $5.3 billion to $5.8 billion. Similarly, projected gross margin was reduced to $1.96 billion to $2.47 billion, and earnings per diluted share were revised to a range of $12.50 to $17.50, from an earlier estimate of $17.00 to $20.00.
Operational Outlook and Tax Credits: Despite near-term challenges, First Solar anticipates module sales volume of 3.0 GW to 3.9 GW in the second quarter. The company expects to benefit from Section 45X of the Internal Revenue Code, forecasting tax credits between $310 million and $350 million for the quarter. These credits are expected to support second-quarter earnings per diluted share in the range of $2.00 to $3.00, indicating a partial buffer against recent headwinds.
Strategic Positioning and Long-Term Prospects: CEO Mark Widmar emphasized the company's resilience and strategic advantages, including its status as the largest U.S.-based and only fully vertically integrated solar module manufacturer. First Solar’s proprietary CadTel-based technology, domestic supply chain partnerships, and compliance with the Inflation Reduction Act (IRA) position it favorably for long-term growth in the U.S. solar market, despite regulatory and operational pressures.
Sales Backlog and Bookings Performance: As of the first quarter, First Solar reported year-to-date net bookings of 0.7 GW, with 0.6 GW booked since the prior quarter's earnings call at an average selling price of 30.5 cents per watt, excluding certain adjustments. The company’s expected sales backlog remains strong at 66.3 GW, providing long-term revenue visibility and indicating robust market demand for its products.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on First Solar Inc (NASDAQ: FSLR) at the current market price of USD 159.75, as on June 04 2025 at 08:15 AM PDT.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Solar
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| FSLR First Solar Inc |
14.51 8.51% | 185.03 | 16.61 | 9.35 | 5.36 | 2.72 | 5.21 | 11.40 |
| ENPH Enphase Energy Inc |
1.60 3.91% | 42.57 | 136.61 | 18.32 | 6.79 | 9.24 | 6.51 | 53.17 |
| NXT Nextracker Inc. Class A Common Stock |
5.27 8.63% | 66.31 | 16.44 | 12.44 | 2.71 | 15.50 | 2.46 | 15.56 |
| XISHY Xinyi Solar Holdings Limited |
- -% | 6.94 | 11.55 | 14.93 | 0.22 | 1.24 | 0.24 | 1.12 |
| XNYIF Xinyi Solar Holdings Limited |
- -% | 0.30 | 10.10 | 13.72 | 0.22 | 1.37 | 0.24 | 1.12 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is Jun 04,2025. The reference data in this report has been partly sourced from REFINITIV
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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