First Solar Hits 52-Week High on Solid Alt Energy Prospects

Shares of First Solar, Inc. FSLR hit a new 52-week high of $67.8 on Dec 24, eventually closing at $66.92. The company returned 53.2% in the past one-year period and approximately 50.2% year to date. The average volume of shares traded over the last three months was roughly 2.2M.

What is Driving First Solar?

First Solar designs, manufactures and sells solar electric power modules using a proprietary thin-film semiconductor technology. It sells its products to project developers, system integrators and renewable energy project operators primarily in Europe and particularly in Germany. First Solar also engages in designing and deploying commercial solar projects for utilities.

We believe that the company’s business is being driven by positive trends in the solar space lately, especially after the historic Paris Climate Deal where about 195 countries agreed to curb global warming and greenhouse gas production in the coming years. The extension of the U.S. tax credit for solar energy producers by three more years gave a further impetuous to the space. Global warming and high fuel emission issues have helped the sector perform positively lately, and could lead to solid performances in the New Year as well.

In the third quarter, First Solar reported earnings of $3.38 per share, surpassing the Zacks Consensus Estimate by 118.1%. The improvement from the prior-year figure of 61 cents per share can be attributed to higher gross margins related to the majority sale of the Desert Stateline project, lowering of systems project costs and a decrease in module collection and recycling obligation. First Solar’s revenues of $1,271.2 million outpaced the Zacks Consensus Estimate of $1,097 million.

Additionally, First Solar delivered an average positive earnings surprise of nearly 198.2% over the trailing four quarters. The company’s solid global stronghold, the strategic alliance with Caterpillar to accelerate adoption of solar microgrids and consistent R&D emphasis position it favorably.

Zacks Rank

First Solar currently has a Zacks Rank #2 (Buy). JA Solar Holdings Co., Ltd. JASO, ReneSola Ltd SOL and JinkoSolar Holding Co., Ltd. JKS are some of the other favorably placed stocks in the solar industry, all three sporting a Zacks Rank #1 (Strong Buy).

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