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Financial Strength Rank - Competitive Comparison                                          Profitability Rank - Competitive Comparison

TickerCompany NameFinancial StrengthMarket Cap (M)
FSLRFirst Solar Inc
8/10
6,928.36
RGSEReal Goods Solar Inc
8/10
77.52
SPWRSunPower Corp
6/10
4,989.58
SPIRSpire Corp
4/10
4.60
SLTDSolar3D Inc
4/10
42.12
ASTIAscent Solar Technologies Inc
4/10
17.81
WESTAndalay Solar Inc
3/10
4.44
BSRCBioSolar Inc
2/10
1.57
SSOLSunvalley Solar Inc
0/10
1.48
SLRXSolar Acquisition Corporation
0/10
0.90
GWYTGreenway Energy
0/10
0.00
TickerCompany NameProfitability RankMarket Cap (M)
FSLRFirst Solar Inc
6/10
6,928.36
SPWRSunPower Corp
5/10
4,989.58
WESTAndalay Solar Inc
5/10
4.44
SLTDSolar3D Inc
3/10
42.12
BSRCBioSolar Inc
3/10
1.57
RGSEReal Goods Solar Inc
3/10
77.52
SPIRSpire Corp
2/10
4.60
ASTIAscent Solar Technologies Inc
1/10
17.81
SSOLSunvalley Solar Inc
0/10
1.48
SLRXSolar Acquisition Corporation
0/10
0.90
GWYTGreenway Energy
0/10
0.00

Valuation for First Solar Inc

First Solar Inc is more suitable for Asset Based valuation methods. This includes 1) Net-Net Working Capital Per Share 2) Tangible Book Value Per Share. The Net-Net Working Capital Per Share of First Solar Inc for the quarter that ended in Jun. 2014 was $1.99. The Tangible Book Value Per Share of First Solar Inc for the quarter that ended in Jun. 2014 was $44.61.

Projected FCF and Graham Number are the combination valuation methods of Asset and Earnings Power. The Projected FCF: DCF Projected Intrinsic Value of First Solar Inc for today is $45.79. The Graham Number of First Solar Inc for the quarter that ended in Jun. 2014 was $61.46.

First Solar Inc Net-Net Working Capital

The Net-Net Working Capital Per Share of First Solar Inc for the quarter that ended in Jun. 2014 was $1.99

In calculating the Net-Net Working Capital (NNWC), Benjamin Graham assumed that a company’s accounts receivable is only worth 75% its value, its inventory is only worth 50% of its value, but its liabilities have to be paid in full. In addition, Graham believed that preferred stock belongs on the liability side of the balance sheet, not as part of capital and surplus. In "Security Analysis", preferred stock is dubbed "an imperfect creditorship position" that is best placed on the balance sheet alongside funded debt. This is a conservative way of estimating the company’s value.

Calculation:

    Net-Net Working Capital
    =(CashAndCashEquivalents+0.75 * Acct. Rec.+0.5 * Inventory-Total Liabilities-Preferred Stock)/Shares Outstanding
    =(1348.867+0.75 * 802.811+0.5 * 385.247-1944.06-0)/100.12
    =1.99

For more information about NNWC, visit: Net-Net Working Capital Per Share

First Solar Inc Tangible Book Value Per Share

The Tangible Book Value per share of First Solar Inc for the quarter that ended in Jun. 2014 was $44.61

Calculation:

    Tangible Book Value Per Share
    =(Total Equity-Preferred Stock-Intangibles)/Shares Outstanding
    =(4667.955-0-201.92)/100.12
    =44.61

Since intangibles such as goodwill cannot be sold when the company liquidates, tangible book value per share is considered more accurate in reflecting how much shareholders will receive when the company liquidates.

For more information about tangible book value per share, visit: Tangible Book Value Per Share

First Solar Inc Projected FCF: DCF Projected Intrinsic Value

The DCF projected intrinsic value of First Solar Inc for today is $45.79

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value (DCF), or Discounted Earnings (DCE) Intrinsic Value (DE) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Discounted Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Calculation:

Here First Solar Inc's FCF(6 year avg) is calculate as

First Solar Inc Quarterly Data
201203201206201209201212201303201306201309201312201403201406
total_freecashflow-141271-35288-5137306136-36956
200909200912201003201006201009201012201103201106201109201112
total_freecashflow110345-75-57110138-213-424-21-107
200809200812200903200906
total_freecashflow4275-23-37

Add all the Free Cash Flow together and divide 6 will get First Solar Inc FCF(6 year avg) = $84.38

First Solar Inc's DCF Projected Intrinsic Value for today is calculated as

    Intrinsic Value
    =(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jun14)*0.8)/Shares Outstanding
    =(10.993856732*84.3798333333+4667.955*0.8)/101.814
    =45.79

First Solar Inc's Free Cash Flow Growth Multiple is 10.993856732.

For more information about Projected FCF Intrinsic Value, visit: Intrinsic Value (DCF Projected)

First Solar Inc Median P/S Value

The Median P/S Value of First Solar Inc for today is $162.49

This valuation method assumes that the stock valuation will revert to its historical mean in terms of Price/Sales Ratio. The reason we use P/S Ratio instead of P/E Ratio or P/B Ratio is because Price/Sales Ratio is independent of profit margin, and can be applied to a broader range of situations.

Calculation:

    Median P/S Value
    =Revenue Per Share (TTM)*10-Year Median P/S Ratio
    =34.87*4.66
    =162.49

10-Year Median P/S Ratio is 4.66.
First Solar Inc's revenue per share for the trailing twelve months (TTM) ended in Jun. 2014 was 12.61 (Sep. 2013) + 7.58 (Dec. 2013) + 9.33 (Mar. 2014) + 5.35 (Jun. 2014) = $34.87.

For more information about median p/s value, visit: Median P/S Value

First Solar Inc Graham Number

The Graham Number of First Solar Inc for the quarter that ended in Jun. 2014 was $61.46

Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

Calculation:

    Graham Number
    =SquareRoot of (22.5*(Total Equity - Intangibles)*Net Income (Continuing Operations))/Shares Outstanding
    =SquareRoot of (22.5*(4667.955 - 201.92)*376.833)/100.12
    =61.46

For more information about graham number, visit: Graham Number

Warning Signs for First Solar Inc

GuruFocus has conducted a thorough checkup on the financials and performances of First Solar Inc, and found 2 severe warning signs and 3 medium warning signs . These warning signs do not necessarily mean you should not invest in the stock. But you should be aware of them before you invest. Further reading: New Feature Announcement: The Warning Signs.

First Solar Inc Historical Price and P/E Range

Valuation bands displayed:

  1. Upper red line: P/E=460.6
  2. Lower red line: P/E=5
  3. Green line: price. Current P/E ratio=18.60

Historically First Solar Inc (FSLR) stock has been traded between P/E ratios of 5 and 460.6. If the stock had always been traded at P/E of 5, its stock prices would have been where the lower red line is. Similarly, if the stock had always been traded at 460.6, its stock prices would have been where the upper red line is. The actual stock prices bounces between these two red lines.

Currently, the P/E ratio of First Solar Inc is 18.60

As always, it is always better if the stock prices is close to the lower red line, which implies that the stock is traded at the lower end of valuation.

For more information about this page, visit: GuruFocus Valuation Charts Now Support iPad/iPhone

First Solar Inc Historical Price and P/B Range

Valuation bands displayed:

  1. Upper red line: P/B=22.3
  2. Lower red line: P/B=0.3
  3. Green line: price. Current P/B ratio=1.48

Historically First Solar Inc (FSLR) stock has been traded between P/B ratios of 0.3 and 22.3. If the stock had always been traded at P/B of 0.3, its stock prices would have been where the lower red line is. Similarly, if the stock had always been traded at 22.3, its stock prices would have been where the upper red line is. The actual stock prices bounces between these two red lines.

Currently, the P/B ratio of First Solar Inc is 1.48

As always, it is always better if the stock prices is close to the lower red line, which implies that the stock is traded at the lower end of valuation.

You can find the stocks that are traded at close to its historical low P/B valuation here.

 

First Solar Inc Historical Price and P/S Range

Valuation bands displayed:

  1. Upper red line: P/S=60.5
  2. Lower red line: P/S=0.4
  3. Green line: price. Current P/S ratio=1.98

Historically First Solar Inc (FSLR) stock has been traded between P/S ratios of 0.4 and 60.5. If the stock had always been traded at P/S ratio of 0.4, its stock prices would have been where the lower red line is. Similarly, if the stock had always been traded at 60.5, its stock prices would have been where the upper red line is. The actual stock prices bounces between these two red lines.

Currently, the P/S ratio of First Solar Inc is 1.98

As always, it is always better if the stock prices is close to the lower red line, which implies that the stock is traded at the lower end of valuation.

You can find the stocks that are traded at close to its historical low P/S valuation here.

 

Competitors Comparison of 10-Year Historical P/E ratios

Competitors Comparison

Symbol P/E(ttm) ratio P/E(ttm) ratio 10-Y Range Chart
FSLR 18.60
5.39
386.17
SPWR 27.40
9.05
5480.00
SOL 0.00
0.00
28.49

Industry Comparison

Industry Name FSLR P/E(ttm) ratio Rank # of Companies Chart
Solar Top 12% 164

Competitors Comparison of 10-Year Historical P/S ratios

Competitors Comparison

Symbol P/S ratio P/S ratio 10-Y Range Chart
FSLR 1.98
0.33
51.11
SPWR 2.38
0.17
16.17
SOL 0.15
0.10
4.58

Industry Comparison

Industry Name FSLR P/S ratio Rank # of Companies Chart
Solar Top 31% 164

Competitors Comparison of 10-Year Historical P/B ratios

Competitors Comparison

Symbol P/B ratio P/B ratio 10-Y Range Chart
FSLR 1.48
0.30
21.25
SPWR 3.69
0.39
12.96
SOL 1.70
0.20
6.33

Industry Comparison

Industry Name FSLR P/B ratio Rank # of Companies Chart
Solar Top 13% 164

Competitors Comparison of 10-Year Historical Price to Free Cash Flow ratios

Competitors Comparison

Symbol Price to Free Cash Flow ratio Price to Free Cash Flow ratio 10-Y Range Chart
FSLR 52.79
4.27
5418.00
SPWR 0.00
20.02
188.83
SOL 0.00
0.00
11.31

Industry Comparison

Industry Name FSLR Price to Free Cash Flow ratio Rank # of Companies Chart
Solar Bottom 49% 164

Competitors Comparison of 10-Year Historical Yield

Competitors Comparison

Symbol Historical Yield Historical Yield 10-Y Range Chart
FSLR 0.00
SPWR 0.00
SOL 0.00

Industry Comparison

Industry Name FSLR Historical Yield Rank # of Companies Chart
Solar Top 50% 164

Add Notes, Comments or Ask Questions

User Comments

Jepierreny
ReplyJepierreny - 3 months ago
The market is absolutely clueless when it comes to this stock, ZA. This company is basically God's gift to individual investors, yet the public is refusing to accept this fabulous present. I don't know why. This company's fundamentals are are absolutely mind-boggling: double-digit net profit margins; virtually no debt; earnings per share that exceed the market-per-share price; a price-to-earnings ratio under 5; 5-year rising income, and sales, numbers; double-digit return on equity and assets since the company's inception; and a book value that's four times the size of its market price (which would be like purchasing a beautiful house valued at $800,000 for $200,000 - who wouldn't want such a sweet deal).

Zuoan has more CASH IN THE BANK than the value of all of its ADS shares combined. The company is literally drowning in cash. This is the kind of stock that Warren Buffett (Trades, Portfolio) (and all classic value investors, like myself) salivate over. But, because U.S. investors are currently prejudice against Chinese companies, the market price for ZA continues to lag. Well, that leaves more shares for me.

As the company's future earnings reports come out, and as management gets around to instituting a permanent dividend - which they are probably likely to do, as they have already agreed to give us a special 10% dividend distribution this upcoming June, 2014 - the rest of the market will realize the error of its ways, and investors will flock to this company in droves.

But for now, the Zuoan faithful must be patient, and continue to stock up on the company's shares, so that we can make a killing later on. It reminds me of the time when Warren Buffett (Trades, Portfolio) invested in the Chinese car company, BYD, not too long ago, picking up a hefty amount of stock at around $1/share. The public thought Buffett had lost his marbles. They ridiculed him for this investment choice in a foreign stock. And, indeed, BYD stock prices plummeted for a while after Buffett's acquisition, as the company faced industry and market challenges. But since then, the company has almost quadrupled its revenues, which has caused its profit margins to spike as well; and, of course, the stock price has skyrocketed to reflect the company's sound economic fundamentals. Value fundamentals which Buffett had the foresight to notice in 2009, before the investing public came around to it. Yep, that's right.

I view ZA just as Warren Buffett (Trades, Portfolio) did BYD. ZA is ranked #2 in sales in China, controlling a significant portion of the market share in the Chinese designer-clothing sector. Zuoan also has stores in almost all of China's provinces (which is a very difficult feat to accomplish, unless you have the cash to make it happen - which ZA does). Furthermore, Zuoan's young CEO, James Hong, was awarded Fashion Designer of the Year on multiple occasions by the China Fashion Association, and he currently owns a sizable stake in both the company's Chinese, and American, markets, which proves that management is not just talking the talk, but also walking the walk.

What more can you ask for, people.

Well, like Warren Buffett (Trades, Portfolio) said: "Be greedy when other's are fearful, and be fearful when others are greedy." For those of us who have chosen to keep, and grow, our ZA positions, I'm quite certain that we will be rewarded in the future. It may take some time, since the stock is a foreign stock, and therefore will be a victim of US-market discrimination. But, as a value investor, I've always used a company's balance sheets and income statements - and not the irrational whim's of the investing public - to make my decisions. And that's why my portfolios have never suffered a losing year.

So, to all my fellow Zuoan investors, invest on. And let's toast to a brighter day!
MichaelBoller
ReplyMichaelBoller - 3 months ago
What sounds good is that ZA (according to their website) is paying out a dividend of approx 10%! of the current price. This supports in my opinion that ZA has a credible business:

"The Company today announced that its Board of Directors has approved and declared a special cash dividend of US$0.05 per ordinary share on its outstanding shares to shareholders of record as of the close of trading on May 16, 2014. Holders of American Depositary Shares ("ADS"), each representing 4 ordinary shares of Zuoan, are accordingly entitled to the cash dividend of US$0.20 per ADS. The depository bank, Deutsche Bank, will distribute the dividends on June 10, 2014. "
MichaelBoller
ReplyMichaelBoller - 4 months ago
It is hard to believe how low this stock is trading. It seems to be a stock with one of the lowest valuation related to price / book, price /earnings or whatever valuation ratio on the stock market. I have no idea why the valuation is so low - the financials are strong and the company is profitable. In addition, the company has a reputational business and brand. Never mind the market.
MichaelBoller
ReplyMichaelBoller - 4 months ago
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