We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
First Solar vs. Enphase: Which Solar Stock Is the Better Player in 2025?
Read MoreHide Full Article
As industries across the board are accelerating their shift toward cleaner energy, solar photovoltaic (PV) deployment has experienced remarkable growth worldwide in recent years. As investor appetite for green energy intensifies, solar heavyweights like First Solar (FSLR - Free Report) and Enphase Energy (ENPH - Free Report) present distinct yet compelling opportunities worth exploring.
While First Solar specializes in manufacturing advanced thin-film PV solar modules and focuses on deploying utility-scale solar projects, Enphase Energy is a pioneer in developing microinverters, along with offering home energy solutions, which connect energy generation, energy storage, and control and communications management on one intelligent platform. With solar PV set to become the largest renewable source by the end of 2029 (as predicted by the International Energy Agency), investor interest in solar stocks will continue to surge. Against this backdrop, choosing between two standout players in the sector can be challenging. Here's a comparative analysis to help an investor make an informed investment decision.
Key Takeaways for FSLR
Recent Achievements & Growth Prospects: First Solar ended the first quarter of 2025 with year-over-year sales growth of 6.4%. The company’s total installed nameplate production capacity across all its facilities was approximately 21 gigawatts (GW) as of March 31, 2025. With a strong global footprint, First Solar enjoys a solid presence in the United States, India, Malaysia and Vietnam.
Looking ahead, through its vigorous manufacturing capacity expansion, the company expects to have an annual manufacturing capacity of more than 25 GW by the end of 2026. Such a solid manufacturing enhancement strategy should attract more customers, thereby boosting its revenue stream.
Financial Stability: First Solar’s cash and cash equivalents as of March 31, 2025, were $891 million. Its long-term debt as of March 31, 2025, totaled $328 million, and the current debt level was $197 million. Therefore, the stock’s cash reserve was much higher than the long-term and current debt levels. So, we may safely conclude that First Solar boasts a strong solvency position, which, in turn, should enable FSLR to meet its investment target of $1.0-$1.5 billion in building new manufacturing facilities, expanding the existing ones, as well as upgrading machinery and equipment. Such a robust capital expenditure plan can be expected to allow the company to meet its targeted manufacturing capacity enhancement.
Challenges to Note: First Solar had earlier expressed its concerns over oversupply in the solar module market, especially from Chinese manufacturers that added an estimated 270 GW of capacity in 2024 alone. This surge could lead to a structural imbalance, triggering price volatility and pressuring margins if competitors slash prices below production costs.
Compounding the challenge, FSLR has recently identified manufacturing issues in certain Series 7 modules produced in 2023-2024 that may cause premature power loss in the field. The company expects losses related to this issue to be between $56 million and $100 million, which could weigh on near-term operating results. These setbacks likely influenced FSLR’s decision to lower its 2025 solar module sales target from 18-20 GW to 15.5-19.3 GW, as disclosed in its first-quarter 2025 earnings release. Together, these factors may affect FSLR’s pricing power, profitability and near-term growth outlook.
Key Takeaways for ENPH
Recent Achievements & Growth Prospects: Enphase Energy ended the first quarter of 2025 with a solid 35.2% year-over-year improvement in its sales, backed by higher battery sales in Europe, where the company ramped up shipments of its IQ Battery 5P with FlexPhase.
Looking ahead, to capture more shares of the expanding global solar market, Enphase has been making innovations and launching its state-of-the-art products in new nations. Notably, in the first quarter, the company started shipping its IQ8P microinverters in Vietnam and Malaysia, as well as the Latin American nations of Colombia, Panama and Costa Rica. Meanwhile, the company is making progress with its fourth-generation IQ battery, which offers 60% less wall space, owing to its integrated battery management and power conversion architecture. This battery, paired with Enphase’s IQ Meter Collar and new Enhanced Combiner, can reduce installed costs by approximately $300 per kilowatt hour for a typical backup system.
Financial Stability: Enphase had cash and cash equivalents (including marketable securities) of 1.53 billion as of March 31, 2025. The company’s long-term debt totaled $0.57 billion, while its current debt was $0.63 billion as of the aforementioned date. This indicates that the company’s long-term and current debts are both lower than the cash balance. So, we may safely conclude that it holds a solid solvency position, which should enable ENPH to meet its investment target for expanding its manufacturing capabilities.
Challenges to Note: In February 2025, U.S.-imposed tariffs on key trading partners triggered retaliatory actions, particularly from China. Although the sweeping tariffs on Chinese imports are currently on hold, they could be reinstated any time. Enphase Energy, which sources lithium-ion phosphate battery cells from China and components from various Asian countries, could face increased costs if trade tensions escalate further. Notably, in the first quarter of 2025, its gross margin was partly affected by increased warranty expenses tied to tariff-related product replacements.
Meanwhile, the company has been witnessing a slowdown in product demand in some parts of Europe. In particular, countries like France and the Netherlands continue to exhibit weak market conditions. Lower utility rates in Europe remain a challenge for Enphase’s sell-through and revenue performance in the region. While Enphase sees long-term potential in European markets, it expects the softness, especially in France, to persist through second and third quarters of 2025, potentially affecting its near-term financial results.
How Do Zacks Estimates Compare for FSLR & ENPH?
The Zacks Consensus Estimate for First Solar’s 2025 sales and earnings per share (EPS) implies an improvement of 16.8% and 21.4%, respectively, from the year-ago quarter’s reported figures. The stock’s EPS estimates, however, have been trending southward over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Enphase Energy’s 2025 sales implies a year-over-year improvement of 7.3%, while that for its EPS suggests an increase of 2.1%. The stock’s near-term bottom-line estimates, however, have been trending southward over the past 60 days.
Image Source: Zacks Investment Research
Stock Price Performance: FSLR vs ENPH
FSLR (12.219.5%) has outperformed ENPH (down 35.2%) over the past three months, and it has done the same in the past year as well. While FSLR’s shares have lost 42.7%, ENPH plunged 68.3%.
Image Source: Zacks Investment Research
Valuation of FSLR More Attractive Than That of ENPH
First Solar is trading at a forward earnings multiple of 9.10X, below its median of 9.98X over the past year and Enphase Energy’s forward earnings multiple of 14.92X.
Image Source: Zacks Investment Research
Final Decision
While both First Solar and Enphase Energy are influential players in the evolving solar landscape, FSLR appears to be presenting relatively better fundamentals at this point.
Despite near-term headwinds, including manufacturing setbacks and market oversupply, First Solar offers greater financial stability, stronger revenue visibility and a more attractive valuation than Enphase. ENPH, though innovative and globally expanding, continues to grapple with softer European demand and potential cost pressures from tariff-related uncertainties.
However, the fact that both stocks reflect a declining trend in their earnings estimate indicates that analysts are losing confidence in the earnings generation capacity for both these solar players. This, along with the stocks’ dismal performance at the bourses, suggests that investors may want to keep a close watch on both companies and consider cutting back on their positions in FSLR and ENPH until the outlook improves
FSLR and ENPH currently hold a Zacks Rank #5 (Strong Sell).
Image: Bigstock
First Solar vs. Enphase: Which Solar Stock Is the Better Player in 2025?
As industries across the board are accelerating their shift toward cleaner energy, solar photovoltaic (PV) deployment has experienced remarkable growth worldwide in recent years. As investor appetite for green energy intensifies, solar heavyweights like First Solar (FSLR - Free Report) and Enphase Energy (ENPH - Free Report) present distinct yet compelling opportunities worth exploring.
While First Solar specializes in manufacturing advanced thin-film PV solar modules and focuses on deploying utility-scale solar projects, Enphase Energy is a pioneer in developing microinverters, along with offering home energy solutions, which connect energy generation, energy storage, and control and communications management on one intelligent platform. With solar PV set to become the largest renewable source by the end of 2029 (as predicted by the International Energy Agency), investor interest in solar stocks will continue to surge. Against this backdrop, choosing between two standout players in the sector can be challenging. Here's a comparative analysis to help an investor make an informed investment decision.
Key Takeaways for FSLR
Recent Achievements & Growth Prospects: First Solar ended the first quarter of 2025 with year-over-year sales growth of 6.4%. The company’s total installed nameplate production capacity across all its facilities was approximately 21 gigawatts (GW) as of March 31, 2025. With a strong global footprint, First Solar enjoys a solid presence in the United States, India, Malaysia and Vietnam.
Looking ahead, through its vigorous manufacturing capacity expansion, the company expects to have an annual manufacturing capacity of more than 25 GW by the end of 2026. Such a solid manufacturing enhancement strategy should attract more customers, thereby boosting its revenue stream.
Financial Stability: First Solar’s cash and cash equivalents as of March 31, 2025, were $891 million. Its long-term debt as of March 31, 2025, totaled $328 million, and the current debt level was $197 million. Therefore, the stock’s cash reserve was much higher than the long-term and current debt levels. So, we may safely conclude that First Solar boasts a strong solvency position, which, in turn, should enable FSLR to meet its investment target of $1.0-$1.5 billion in building new manufacturing facilities, expanding the existing ones, as well as upgrading machinery and equipment. Such a robust capital expenditure plan can be expected to allow the company to meet its targeted manufacturing capacity enhancement.
Challenges to Note: First Solar had earlier expressed its concerns over oversupply in the solar module market, especially from Chinese manufacturers that added an estimated 270 GW of capacity in 2024 alone. This surge could lead to a structural imbalance, triggering price volatility and pressuring margins if competitors slash prices below production costs.
Compounding the challenge, FSLR has recently identified manufacturing issues in certain Series 7 modules produced in 2023-2024 that may cause premature power loss in the field. The company expects losses related to this issue to be between $56 million and $100 million, which could weigh on near-term operating results. These setbacks likely influenced FSLR’s decision to lower its 2025 solar module sales target from 18-20 GW to 15.5-19.3 GW, as disclosed in its first-quarter 2025 earnings release. Together, these factors may affect FSLR’s pricing power, profitability and near-term growth outlook.
Key Takeaways for ENPH
Recent Achievements & Growth Prospects: Enphase Energy ended the first quarter of 2025 with a solid 35.2% year-over-year improvement in its sales, backed by higher battery sales in Europe, where the company ramped up shipments of its IQ Battery 5P with FlexPhase.
Looking ahead, to capture more shares of the expanding global solar market, Enphase has been making innovations and launching its state-of-the-art products in new nations. Notably, in the first quarter, the company started shipping its IQ8P microinverters in Vietnam and Malaysia, as well as the Latin American nations of Colombia, Panama and Costa Rica. Meanwhile, the company is making progress with its fourth-generation IQ battery, which offers 60% less wall space, owing to its integrated battery management and power conversion architecture. This battery, paired with Enphase’s IQ Meter Collar and new Enhanced Combiner, can reduce installed costs by approximately $300 per kilowatt hour for a typical backup system.
Financial Stability: Enphase had cash and cash equivalents (including marketable securities) of 1.53 billion as of March 31, 2025. The company’s long-term debt totaled $0.57 billion, while its current debt was $0.63 billion as of the aforementioned date. This indicates that the company’s long-term and current debts are both lower than the cash balance. So, we may safely conclude that it holds a solid solvency position, which should enable ENPH to meet its investment target for expanding its manufacturing capabilities.
Challenges to Note: In February 2025, U.S.-imposed tariffs on key trading partners triggered retaliatory actions, particularly from China. Although the sweeping tariffs on Chinese imports are currently on hold, they could be reinstated any time. Enphase Energy, which sources lithium-ion phosphate battery cells from China and components from various Asian countries, could face increased costs if trade tensions escalate further. Notably, in the first quarter of 2025, its gross margin was partly affected by increased warranty expenses tied to tariff-related product replacements.
Meanwhile, the company has been witnessing a slowdown in product demand in some parts of Europe. In particular, countries like France and the Netherlands continue to exhibit weak market conditions. Lower utility rates in Europe remain a challenge for Enphase’s sell-through and revenue performance in the region. While Enphase sees long-term potential in European markets, it expects the softness, especially in France, to persist through second and third quarters of 2025, potentially affecting its near-term financial results.
How Do Zacks Estimates Compare for FSLR & ENPH?
The Zacks Consensus Estimate for First Solar’s 2025 sales and earnings per share (EPS) implies an improvement of 16.8% and 21.4%, respectively, from the year-ago quarter’s reported figures. The stock’s EPS estimates, however, have been trending southward over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Enphase Energy’s 2025 sales implies a year-over-year improvement of 7.3%, while that for its EPS suggests an increase of 2.1%. The stock’s near-term bottom-line estimates, however, have been trending southward over the past 60 days.
Image Source: Zacks Investment Research
Stock Price Performance: FSLR vs ENPH
FSLR (12.219.5%) has outperformed ENPH (down 35.2%) over the past three months, and it has done the same in the past year as well. While FSLR’s shares have lost 42.7%, ENPH plunged 68.3%.
Image Source: Zacks Investment Research
Valuation of FSLR More Attractive Than That of ENPH
First Solar is trading at a forward earnings multiple of 9.10X, below its median of 9.98X over the past year and Enphase Energy’s forward earnings multiple of 14.92X.
Image Source: Zacks Investment Research
Final Decision
While both First Solar and Enphase Energy are influential players in the evolving solar landscape, FSLR appears to be presenting relatively better fundamentals at this point.
Despite near-term headwinds, including manufacturing setbacks and market oversupply, First Solar offers greater financial stability, stronger revenue visibility and a more attractive valuation than Enphase. ENPH, though innovative and globally expanding, continues to grapple with softer European demand and potential cost pressures from tariff-related uncertainties.
However, the fact that both stocks reflect a declining trend in their earnings estimate indicates that analysts are losing confidence in the earnings generation capacity for both these solar players. This, along with the stocks’ dismal performance at the bourses, suggests that investors may want to keep a close watch on both companies and consider cutting back on their positions in FSLR and ENPH until the outlook improves
FSLR and ENPH currently hold a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.