First Solar Is a Frustrating Stock

Making money seems to be impossible in the solar industry as even the best of the companies like First Solar (FSLR) are falling. Recently, First Solar shared its robust Q2 results. The company’s revenue came in at $934.38 million, $71.1 million better than the analysts’ estimates. It also signifies a surge of 4.3 percent year over year. The company even beat the estimates on earnings as it reported EPS of $0.87 versus the consensus of $0.55.

Despite the stunning report, shares of First Solar tanked over 10%. While it may be frustrating for long term investors, I think this is a buying opportunity and investors should capitalize on it instead of getting frustrated.

First Solar is the one of the few solar firms that has successfully managed to report consistent profitability throughput the prior ten years despite suffering a short lapse when the market collapsed.
More significantly, the company uses a Cd-Te technology that differentiates it from other players in the industry.

Apart from this, First Solar also said that it is planning to further improve its efficiency. In 2017, the company will probably launch its new Series 5 module. The company’s Series 4 technology is an amazing product that comprises a superior temperature coefficient, spectral gain, as well as shading response. Series 4 clasps an energy density benefit compared to multi crystalline silicon products.

But in the case of Series 5, it has the energy density benefit with the company’s CadTel technology which further increases efficiency and is optimized for cost effective installations.

However, the company is not the most efficient solar panel manufacturer in the industry, but their latest thin films panels are most efficient compared to the most solar panels exported from China and perform better in most extreme environments.

The reason behind the company’s achievement is its focus on the utility scale solar market, proposing low cost solutions to utilities and massive corporate consumers. Though the company designs entire solutions, it can lower costs across the board and also develop projects on its own.

Keeping in mind that technology enhances with time and the company’s robust balance sheet, it is very clear that it has a lot of potential to maintain a strong position as a project developer in the imminent years. This will eventually result in huge profits.


Although it may be frustrating to see First Solar tank, I think investors should capitalize on this by adding to their positions.
Published on Aug 5, 2016
By Vinay Singh

Copyrighted 2020. Content published with author's permission.

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