First Solar’s Rating Downgrade: Analyzing the Solar Industry Giant’s Financials
In a recent research report issued by StockNews.com, First Solar （NASDAQ:FSLR） was downgraded from “hold” to “sell”。 The downgrade follows the company’s quarterly earnings announcement on April 27th, in which the solar cell manufacturer reported an EPS of $0.40 for the quarter, missing analysts’ consensus estimates of $0.99 by a significant margin. This led to a decrease in revenue, which stood at $548.29 million compared to the consensus estimate of $716.66 million.
First Solar has been a significant player in the solar industry for many years now, providing photovoltaic solar energy solutions across several countries around the world. The company designs and manufactures cadmium telluride solar modules that convert sunlight into electricity, catering primarily to developers and operators of systems, utilities, independent power producers, commercial and industrial companies, and other system owners.
Despite its dominance in the industry market share perspective, it is clear that First Solar has fallen short of expectations when it comes to financial performance. At present return on equity stands at a meagre 0.71%, indicating that most capital is not working as productively as investors would prefer while its net margin is only at 1.49%. With these figures showcasing quite underwhelming ROI indicators such as Return on Assets and Return on Investment also stand significantly underperformed against industry peers.
However one silver-lining which shines through these less than desirable results is how much they have improved compared to last year’s data. Over the same period last year FSLR posted an EPS loss （$0.41）， resulting in this being considered exceptional progress despite failing to meet analyst expectations this quarter.
Although First Solar had seen strong revenue growth over recent years with consistent beats of performance estimates analysts are less than optimistic for their current fiscal year as they predict that First Solar will post 7.33 EPS for the current fiscal year, indicating lackluster growth.
Furthermore, the stock market performance of the company has reflected poor numbers, lacking favorable moves in share price movement and volume trends contributing further to investor confidence receding.
All in all, while First solar may hold their position as a giant within their respective Industry, it seems the companies financials need sorting if they are to return to meeting those high expectations investors currently hold.
In Summary; A lesser than perfect few quarters of returns combined with a lacklustre predicted current fiscal year has seen First Solar downgraded from “hold” to “sell”。 A potentially worrying time period for FSLR moving forward until some recovery plans arise.
First Solar Receives Mixed Reviews from Analysts, But Continues Upward Trend
First Solar Inc., a provider of photovoltaic solar energy solutions, has received mixed reviews from equities analysts. While some have downgraded the company’s stock rating due to rising share prices, others have given it an “overweight” rating and boosted its target price. According to data from Bloomberg.com, First Solar currently maintains a consensus “Hold” rating with an average price target of $210.92.
Despite its varying ratings, First Solar’s stock has continued on an upward trend in recent months. Shares opened at $187.08 on Friday and the company boasts a market cap of $19.99 billion. It also has a 12-month high of $232.00 and has consistently remained above its 50-day simple moving average of $198.09.
First Solar designs, manufactures, and sells cadmium telluride solar modules that convert sunlight into electricity for various industries such as utilities, commercial and industrial companies, independent power producers, among others.
Additionally, insiders continue to sell shares with Director Paul H. Stebbins recently selling 2,500 shares valued at approximately $573,275 while CEO Mark R. Widmar sold nearly 40k shares worth over $7 million just days ago.
Despite insider sales and hedge fund additions or reductions in their stakes in the business suggesting caution by investors, First Solar has remained optimistic with hopes of further growth through expanded international partnerships and agreements which will likely spur future innovation and profitability for the company as a whole.
