First Solar Inc (FSLR, Financial) recorded a daily loss of -1.14% and a 3-month loss of -11.81%. Despite these losses, the company's Earnings Per Share (EPS) stands at 1.46. This article aims to answer the question: Is First Solar significantly overvalued? Let's delve into a detailed valuation analysis of First Solar.
Company Introduction
First Solar Inc (FSLR, Financial), the world's largest thin-film solar module manufacturer, designs and manufactures solar photovoltaic panels, modules, and systems for utility-scale development projects. With production lines in Vietnam, Malaysia, the United States, and India, First Solar uses cadmium telluride to convert sunlight into electricity, a technology commonly known as thin-film technology.
Trading at $179.84 per share, with a market cap of $19.20 billion, First Solar's current stock price is significantly higher than its GF Value of $98.84, indicating that the stock may be overvalued.
Understanding the GF Value
The GF Value is a proprietary measure that represents the intrinsic value of a stock. It's calculated based on historical trading multiples, a GuruFocus adjustment factor based on past performance and growth, and future business performance estimates. The GF Value Line on our summary page gives an overview of the fair value that the stock should be traded at.
If the stock price is significantly above the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher.
Given First Solar's current price of $179.84 per share and a market cap of $19.20 billion, the stock is estimated to be significantly overvalued. Thus, the long-term return of its stock is likely to be much lower than its future business growth.
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