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Why Is First Solar (FSLR) Up 12.2% Since Last Earnings Report?

Zacks Equity Research
·4 min read

It has been about a month since the last earnings report for First Solar (FSLR). Shares have added about 12.2% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is First Solar due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

First Solar Q4 Earnings Beat Estimates, Sales Rise Y/Y

First Solar reported fourth-quarter 2023 earnings of $3.25 per share against the prior-year quarter’s reported loss of 7 cents per share. The bottom line beat the Zacks Consensus Estimate of $3.19 by 1.9%.

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FSLR recorded earnings of $7.74 per share in 2023 against a loss of 41 cents per share in 2022.

Sales Update

First Solar’s fourth-quarter net sales were $1,158.6 million, which lagged the Zacks Consensus Estimate of $1,311 million by 1.7%. However, the top line improved 15.6% from the year-ago quarter’s $1,002.4 million. The year-over-year upside can be attributed to increased module sales.

For 2023, the company generated revenues worth $3.32 billion compared with the prior-year figure of $2.62 billion.

Operational Highlights

In the fourth quarter, the gross profit was $502 million, which improved massively from $60.6 million in the year-ago quarter.

Total operating expenses increased 3.8% year over year to $110.8 million due to higher research and development costs as well as selling, general and administrative expenses.

FSLR reported an operating income of $397.8 million against an operating loss of $45.9 million in the year-ago quarter.

Financial Performance

First Solar had $1.95 billion in cash and cash equivalents as of Dec 31, 2023, up from $1.48 billion as of Dec 31, 2022.

The long-term debt totaled $464 million as of Dec 31, 2023, compared with $184.3 million as of Dec 31, 2022.

2024 Guidance

First Solar introduced its 2024 earnings guidance. FSLR expects earnings in the range of $13-$14 per share for 2024. The Zacks Consensus Estimate for earnings is pegged at $13.2 per share, lower than the midpoint of the company’s guided range.

FSLR expects sales in the range of $4.4-$4.6 billion in 2024. The Zacks Consensus Estimate for the same is pinned at $4.56 billion, higher than the midpoint of the company’s guided range.

First Solar expects gross profit in the band of $2-$2.1 billion. The operating income is anticipated in the $1.5-$1.6 billion range.

Meanwhile, the company expects module shipments in the band of 15.6-16.3 gigawatts in 2024.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -17.48% due to these changes.

VGM Scores

At this time, First Solar has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, First Solar has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

First Solar is part of the Zacks Solar industry. Over the past month, SolarEdge Technologies (SEDG), a stock from the same industry, has gained 6.3%. The company reported its results for the quarter ended December 2023 more than a month ago.

SolarEdge reported revenues of $316.04 million in the last reported quarter, representing a year-over-year change of -64.5%. EPS of -$0.92 for the same period compares with $2.86 a year ago.

SolarEdge is expected to post a loss of $1.53 per share for the current quarter, representing a year-over-year change of -152.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.7%.

SolarEdge has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.

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First Solar, Inc. (FSLR) : Free Stock Analysis Report

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Zacks Investment Research