First Solar Inc (FSLR): A Deep Dive into Its Performance Potential

Unraveling the Factors That Could Limit Future Outperformance

Long-established in the Semiconductors industry, First Solar Inc (FSLR, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 1.1%, juxtaposed with a three-month change of -10.53%. However, fresh insights from the GuruFocus Score Rating 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.

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Understanding 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.

Based on the above method, GuruFocus assigned First Solar Inc the GF Score of 68 out of 100, which signals poor future outperformance potential.

First Solar Inc: A Snapshot of Its Business

First Solar Inc, with a market cap of $18.117 billion, designs and manufactures solar photovoltaic panels, modules, and systems for use in utility-scale development projects. The company's solar modules use cadmium telluride to convert sunlight into electricity, a process commonly referred to as thin-film technology. As the world's largest thin-film solar module manufacturer, First Solar has production lines in Vietnam, Malaysia, the United States, and India. The company's sales stand at $2.99 billion, with an operating margin of 3.39%.

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Growth Prospects

A lack of significant growth is another area where First Solar Inc seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -5.5 per year over the past three years, which underperforms worse than 82.89% of 871 companies in the Semiconductors industry. Stagnating revenues may pose concerns in a fast-evolving market. Lastly, First Solar Inc's predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.

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Conclusion

Given the company's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. While First Solar Inc has a strong history in the Semiconductors industry, its current GF Score and other key metrics suggest that it may struggle to maintain its past performance. Investors should consider these factors when making investment decisions.

GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure