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First Solar Plunges 21.2% in Past 6 Months: How to Play the Stock?
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Key Takeaways
FSLR stock has dropped 21.2% in six months, underperforming peers and broader energy and market indices.
Earnings fell 11.4% in Q1, with warranty charges and tariffs weighing on 2025 guidance and near-term outlook.
FSLR is expanding U.S. manufacturing and projects 16% revenue growth in both 2025 and 2026.
Shares of First Solar Inc. (FSLR - Free Report) have plunged 21.2% in the past six months, underperforming the Zacks solar industry’s decline of 19.3% as well as the broader Zacks Oil-Energy sector’s growth of 5.3%. It also lagged the S&P 500’s growth of 0.3%.
Image Source: Zacks Investment Research
On the contrary, other solar stocks, such as Canadian Solar (CSIQ - Free Report) and SolarEdge Technologies (SEDG - Free Report) , have outperformed the industry in the past six months. Shares of CSIQ have lost 7.8%, while shares of SEDG have gained 15%.
With FSLR’s weak performance on the bourses, some investors may consider buying the stock while it's cheap. However, before taking any decision, it is important to understand the reasons behind this dismal performance. Does the company have what it takes to bounce back, or are there risks that may affect its future growth? The idea is to help investors make a more insightful decision.
What Caused FSLR to Plunge?
FSLR’s dismal performance on the bourses seems to have been influenced by its weak first-quarter 2025 results, recently imposed tariffs and manufacturing issues.
Notably, the company ended the first quarter on a dismal note, with its earnings per share going down 11.4% on a year-over-year basis. Its operating income also slid significantly.
Moreover, First Solar has been facing manufacturing issues affecting certain of its Series 7 modules manufactured in 2023 and 2024. This, in turn, has led the company to incur significant warranty charges in recent quarters. Looking ahead, warranty charges related to Series 7 manufacturing issues are estimated to result in total charges ranging between $56 million and $100 million in the near future. This, in turn, might adversely impact its operational results.
Further, in April 2025, the U.S. President announced a 10% “baseline” tariff on most trading partners, including Vietnam, India and Malaysia, along with higher tariffs on select countries. While the higher tariffs were paused for 90 days, the 10% tariff remains in place for most countries. Since First Solar makes modules in these regions, the tariffs could raise costs, impact international operations and hurt overall operating results. The company has even lowered its 2025 guidance, taking into account the expected impact of the implementation of these new tariffs.
What Lies Ahead for FSLR Stock?
As the largest solar PV manufacturer in the Western Hemisphere, First Solar continues to expand and invest in its manufacturing capacity, aiming to achieve sales growth in the coming quarters. Notably, the company began commercial operations at its fourth manufacturing facility in the United States in the second quarter of 2025. Moreover, it is currently in the process of expanding its manufacturing capacity by approximately four GW, including the construction of its fifth U.S. manufacturing facility, which is expected to commence operations in the second half of 2025.
Such manufacturing capacity expansion plans should allow First Solar to maintain its position as the largest U.S. solar module manufacturer and boost its long-term operational performance.
In line with this, the Zacks Consensus Estimate for FSLR’s long-term (three to five years) earnings growth rate is pegged at 34.5%.
However, the risks associated with the manufacturing issues of certain Series 7 Modules, as mentioned above, as well as the tariff impacts, might affect the company’s performance in the near term.
Now let’s take a quick sneak peek at its near-term estimates to see if that reflects a similar trend.
FSLR’s Near-Term Estimates
The Zacks Consensus Estimate for FSLR’s 2025 and 2026 revenues indicates a solid improvement of 16.3% and 16.8%, respectively, from the prior-year levels. The same for its earnings also indicate a year-over-year improvement.
Image Source: Zacks Investment Research
However, the Zacks Consensus Estimate for FSLR’s 2025 and 2026 earnings per share has moved down considerably in the past 60 days, indicating analysts’ decreasing confidence in the stock’s earnings-generating capabilities.
Image Source: Zacks Investment Research
FSLR Shares Trading at a Premium
FSLR shares are expensive on a relative basis, with its forward 12-month Price/Sales (P/S F12M) being 2.92X compared with its industry average of 1.16X.
Image Source: Zacks Investment Research
Its industry peers, CSIQ and SEDG, are trading at a discount. CSIQ is trading at a P/S F12M of 0.10X, while SEDG is trading at a P/S F12M of 0.83X.
Conclusion
Investors interested in FSLR should wait for a better entry point, considering its premium valuation, downward revision in earnings estimates and near-term risks associated with tariff imposition.
However, those who already own this Zacks Rank #3 (Hold) stock may continue to do so, taking into account its upbeat sales estimates and long-term growth prospects.
Image: Bigstock
First Solar Plunges 21.2% in Past 6 Months: How to Play the Stock?
Key Takeaways
Shares of First Solar Inc. (FSLR - Free Report) have plunged 21.2% in the past six months, underperforming the Zacks solar industry’s decline of 19.3% as well as the broader Zacks Oil-Energy sector’s growth of 5.3%. It also lagged the S&P 500’s growth of 0.3%.
Image Source: Zacks Investment Research
On the contrary, other solar stocks, such as Canadian Solar (CSIQ - Free Report) and SolarEdge Technologies (SEDG - Free Report) , have outperformed the industry in the past six months. Shares of CSIQ have lost 7.8%, while shares of SEDG have gained 15%.
With FSLR’s weak performance on the bourses, some investors may consider buying the stock while it's cheap. However, before taking any decision, it is important to understand the reasons behind this dismal performance. Does the company have what it takes to bounce back, or are there risks that may affect its future growth? The idea is to help investors make a more insightful decision.
What Caused FSLR to Plunge?
FSLR’s dismal performance on the bourses seems to have been influenced by its weak first-quarter 2025 results, recently imposed tariffs and manufacturing issues.
Notably, the company ended the first quarter on a dismal note, with its earnings per share going down 11.4% on a year-over-year basis. Its operating income also slid significantly.
Moreover, First Solar has been facing manufacturing issues affecting certain of its Series 7 modules manufactured in 2023 and 2024. This, in turn, has led the company to incur significant warranty charges in recent quarters. Looking ahead, warranty charges related to Series 7 manufacturing issues are estimated to result in total charges ranging between $56 million and $100 million in the near future. This, in turn, might adversely impact its operational results.
Further, in April 2025, the U.S. President announced a 10% “baseline” tariff on most trading partners, including Vietnam, India and Malaysia, along with higher tariffs on select countries. While the higher tariffs were paused for 90 days, the 10% tariff remains in place for most countries. Since First Solar makes modules in these regions, the tariffs could raise costs, impact international operations and hurt overall operating results. The company has even lowered its 2025 guidance, taking into account the expected impact of the implementation of these new tariffs.
What Lies Ahead for FSLR Stock?
As the largest solar PV manufacturer in the Western Hemisphere, First Solar continues to expand and invest in its manufacturing capacity, aiming to achieve sales growth in the coming quarters. Notably, the company began commercial operations at its fourth manufacturing facility in the United States in the second quarter of 2025. Moreover, it is currently in the process of expanding its manufacturing capacity by approximately four GW, including the construction of its fifth U.S. manufacturing facility, which is expected to commence operations in the second half of 2025.
Such manufacturing capacity expansion plans should allow First Solar to maintain its position as the largest U.S. solar module manufacturer and boost its long-term operational performance.
In line with this, the Zacks Consensus Estimate for FSLR’s long-term (three to five years) earnings growth rate is pegged at 34.5%.
However, the risks associated with the manufacturing issues of certain Series 7 Modules, as mentioned above, as well as the tariff impacts, might affect the company’s performance in the near term.
Now let’s take a quick sneak peek at its near-term estimates to see if that reflects a similar trend.
FSLR’s Near-Term Estimates
The Zacks Consensus Estimate for FSLR’s 2025 and 2026 revenues indicates a solid improvement of 16.3% and 16.8%, respectively, from the prior-year levels. The same for its earnings also indicate a year-over-year improvement.
Image Source: Zacks Investment Research
However, the Zacks Consensus Estimate for FSLR’s 2025 and 2026 earnings per share has moved down considerably in the past 60 days, indicating analysts’ decreasing confidence in the stock’s earnings-generating capabilities.
Image Source: Zacks Investment Research
FSLR Shares Trading at a Premium
FSLR shares are expensive on a relative basis, with its forward 12-month Price/Sales (P/S F12M) being 2.92X compared with its industry average of 1.16X.
Image Source: Zacks Investment Research
Its industry peers, CSIQ and SEDG, are trading at a discount. CSIQ is trading at a P/S F12M of 0.10X, while SEDG is trading at a P/S F12M of 0.83X.
Conclusion
Investors interested in FSLR should wait for a better entry point, considering its premium valuation, downward revision in earnings estimates and near-term risks associated with tariff imposition.
However, those who already own this Zacks Rank #3 (Hold) stock may continue to do so, taking into account its upbeat sales estimates and long-term growth prospects.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.