Long-established in the Semiconductors industry, First Solar Inc (FSLR, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 1.27%, juxtaposed with a three-month change of -1.36%. However, fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of First Solar Inc.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 9/10
- Profitability rank: 6/10
- Growth rank: 9/10
- GF Value rank: 6/10
- Momentum rank: 0/10
Based on the above method, GuruFocus assigned First Solar Inc a GF Score of 69 out of 100, which signals poor future outperformance potential.
Understanding First Solar Inc's Business
With a market capitalization of $17.10 billion and sales of $3.32 billion, First Solar Inc stands as a significant player in the solar energy sector. The company boasts an operating margin of 26.7%, reflecting its efficiency in managing expenses relative to its revenue. As a pioneer in the industry, First Solar designs and manufactures solar photovoltaic panels, modules, and systems primarily for utility-scale development projects. Utilizing cadmium telluride, a thin-film technology, First Solar has established itself as the world's largest thin-film solar module manufacturer, with production lines in Vietnam, Malaysia, the United States, and India.
Assessing the Challenges Ahead
Despite First Solar Inc's robust financial strength and growth metrics, the GF Score highlights the firm's potential for underperformance. The company's momentum rank of 0/10 is particularly concerning, indicating a lack of positive movement in stock price and earnings outlook. This, combined with a moderate profitability rank, suggests that while First Solar Inc is financially stable and growing, it may not be positioned to deliver the high returns investors have come to expect. The solar industry is highly competitive and subject to rapid technological changes, regulatory shifts, and market dynamics, all of which could impact First Solar Inc's future performance.
GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
