A Look At First Solar (FSLR) Valuation After Earnings Miss Backlog Strain And New US Facility Plan

First Solar (FSLR) is back in focus after reporting earnings that missed EPS expectations while topping revenue forecasts, alongside disclosure of a shrinking contracted backlog and fresh order cancellations.

At the same time, management announced a new U.S. solar cell finishing facility intended to cut import costs, access domestic incentives, and align production with what it views as tightening demand for utility scale solar projects.

See our latest analysis for First Solar.

Recent trading reflects this tension, with the 1 day share price return of 2.06% contrasting with a 7 day gain of 5.75% and a 90 day share price decline of 27.33%. At the same time, the 1 year total shareholder return of 50.19% and 5 year total shareholder return of 148.03% highlight that long term holders have still seen strong overall gains.

If you are weighing First Solar against other grid focused energy names, it can help to scan a wider set of power grid technology opportunities using the 27 power grid technology and infrastructure stocks

With earnings missing expectations, a shrinking backlog, an intrinsic discount estimate of about 27%, and long term returns still strong, is First Solar mispriced value or is the market already baking in future growth?

Most Popular Narrative: 25.2% Overvalued

Compared with the last close at $195.32, the most followed narrative, which sets fair value at $155.98, sees First Solar trading well above that mark and frames the recent pullback very differently to the current intrinsic discount estimate.

Known for its high quality solar panels and government cooperation during the Biden administration, First Solar is a strong company when it comes to maintaining its operations and innovating on solar energy.

Our team believes that First Solar is considerably below its fair value. The current semi bear market present in the US markets caused by President Trump’s tariffs and trade war threats has caused negative sentiments in the market which overall reflected on First Solar’s stock price causing it to drop below its fair price.

Read the complete narrative. Read the complete narrative.

The narrative leans on firm profit margins, steady revenue expansion and a future earnings multiple that assumes a strong long term earnings profile. Curious which growth and margin paths have the biggest impact on that $155.98 figure and how they compare with today’s analyst consensus and SWS DCF outcome.

Result: Fair Value of $155.98 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, shrinking contracted backlog and fresh order cancellations could still pressure revenue visibility and challenge assumptions behind that $155.98 fair value anchor.

Find out about the key risks to this First Solar narrative.

Another View: Multiples Point To Cheap, Not Rich

While the most followed narrative sees First Solar as 25.2% overvalued versus a $155.98 fair value, market multiples tell a very different story, with the current P/E of 13.7x sitting far below peers at 70.6x and an estimated fair ratio of 35.7x, raising the question of whether sentiment or fundamentals are driving the gap.

For a closer look at how this P/E gap could cut both ways for valuation risk and opportunity, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Sentiment across these views is clearly mixed. If the setup feels finely balanced, move quickly, review the underlying data, and weigh the 5 key rewards and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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