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Why First Solar (FSLR) Dipped More Than Broader Market Today

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In the latest trading session, First Solar (FSLR - Free Report) closed at $241.11, marking a -10.29% move from the previous day. This change lagged the S&P 500's daily loss of 0.34%. Elsewhere, the Dow lost 0.94%, while the tech-heavy Nasdaq added 0.16%.

Heading into today, shares of the largest U.S. solar company had gained 6.06% over the past month, outpacing the Oils-Energy sector's loss of 1.8% and the S&P 500's gain of 1.19%.

Analysts and investors alike will be keeping a close eye on the performance of First Solar in its upcoming earnings disclosure. In that report, analysts expect First Solar to post earnings of $5.21 per share. This would mark year-over-year growth of 42.74%. Simultaneously, our latest consensus estimate expects the revenue to be $1.58 billion, showing a 4.23% escalation compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $14.6 per share and revenue of $5.11 billion, indicating changes of +21.46% and 0%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for First Solar. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.39% higher. At present, First Solar boasts a Zacks Rank of #2 (Buy).

With respect to valuation, First Solar is currently being traded at a Forward P/E ratio of 11.54. This denotes a discount relative to the industry average Forward P/E of 19.98.

We can additionally observe that FSLR currently boasts a PEG ratio of 0.33. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Solar stocks are, on average, holding a PEG ratio of 0.64 based on yesterday's closing prices.

The Solar industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 35, which puts it in the top 15% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.


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