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

Unraveling the Metrics Behind the Semiconductors Giant's Future Outlook

Long-established in the Semiconductors industry, First Solar Inc (FSLR, Financial) has enjoyed a stellar reputation. It has recently witnessed a daily gain of 5.07%, juxtaposed with a three-month change of -21.34%. 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.

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Decoding 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 69 out of 100, which signals poor future outperformance potential.

Understanding First Solar Inc's Business

First Solar Inc, with a market cap of $16.14 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 83.07% of 874 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

Despite First Solar Inc's historical performance and reputation, the GF Score highlights potential underperformance in the future. The company's financial strength, profitability, and growth metrics indicate a challenging road ahead. As value investors, it's crucial to consider these factors when making investment decisions. Will First Solar Inc overcome these hurdles, or will it succumb to the challenges? Only time will tell.

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.

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