First Solar (NASDAQ: FSLR) has posted a 9% year-to-date gain (May 13), significantly outperforming the S&P 500′s growth, attracting renewed attention from investors focused on renewable energy. While the company’s Q1 earnings fell short of expectations, reporting earnings per share of $1.95 versus the anticipated $2.50, and revenue of $844.57 million compared to a forecast of $866.19 million, First Solar improved its gross margin to 41%, up from 37% in the previous period. The company continues to prioritize domestic manufacturing expansion and the advancement of its proprietary CURE technology. Its competitive edge is further supported by its use of cadmium telluride thin-film solar modules and a fully integrated supply chain. Despite near-term headwinds, First Solar remains confident in its long-term outlook, particularly in the U.S. market, where electricity demand is projected to rise substantially.
First Solar appears to be very attractive at its current price of around $190. We believe there is minimal cause for concern with FSLR stock, which makes it very attractive given that its current valuation looks very low. We arrive at our conclusion by comparing the current valuation of FSLR stock with its operating performance over the recent years, as well as its current and historical financial condition. Our analysis of FSLR along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a very strong operating performance and financial condition, as detailed below. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception. 
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How does First Solar’s valuation look vs. the S&P 500?
Going by what you pay per dollar of sales or profit, FSLR stock looks cheap compared to the broader market.
• First Solar has a price-to-sales (P/S) ratio of 3.5 vs. a figure of 2.8 for the S&P 500
• Additionally, the company’s price-to-free cash flow (P/FCF) ratio is 12.1 compared to 17.6 for S&P 500
• And, it has a price-to-earnings (P/E) ratio of 16.4 vs. the benchmark’s 24.5
How have First Solar’s revenues grown over recent years?
First Solar’s Revenues have grown considerably over recent years.
• First Solar has seen its top line grow at an average rate of 14.3% over the last 3 years (vs. increase of 6.2% for S&P 500)
• Its revenues have grown 26.7% from $3.3 Bil to $4.2 Bil in the last 12 months (vs. growth of 5.3% for S&P 500)
• Also, its quarterly revenues grew 6% to $855 Mil in the most recent quarter from $794 Mil a year ago (vs. 4.9% improvement for S&P 500)
How profitable is First Solar?
First Solar’s profit margins are much higher than most companies in the Trefis coverage universe.
• First Solar’s Operating Income over the last four quarters was $1.4 Bil, which represents a high Operating Margin of 33.1% (vs. 13.1% for S&P 500)
• First Solar’s Operating Cash Flow (OCF) over this period was $1.2 Bil, pointing to a high OCF Margin of 29.0% (vs. 15.7% for S&P 500)
• For the last four-quarter period, First Solar’s Net Income was $1.3 Bil – indicating a considerably high Net Income Margin of 30.7% (vs. 11.3% for S&P 500)
Does First Solar look financially stable?
First Solar’s balance sheet looks very strong.
• First Solar’s Debt figure was $719 Mil at the end of the most recent quarter, while its market capitalization is $17 Bil (as of 5/12/2025). This implies a very strong Debt-to-Equity Ratio of 4.9% (vs. 21.5% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $1.8 Bil of the $12 Bil in Total Assets for First Solar. This yields a strong Cash-to-Assets Ratio of 14.8% (vs. 15.0% for S&P 500)
How resilient is FSLR stock during a downturn?
FSLR stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.
Inflation Shock (2022)
• FSLR stock fell 43.5% from a high of $116.31 on 5 November 2021 to $65.70 on 20 May 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 25 August 2022
• Since then, the stock has increased to a high of $300.71 on 12 June 2024 and currently trades at around $190
Covid Pandemic (2020)
• FSLR stock fell 49.1% from a high of $59.32 on 20 February 2020 to $30.20 on 18 March 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 14 July 2020
Global Financial Crisis (2008)
• FSLR stock fell 72.0% from a high of $311.14 on 16 May 2008 to $87.23 on 20 November 2008, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
Putting all the pieces together: What it means for FSLR stock
In summary, First Solar’s performance across the parameters detailed above are as follows:
• Growth: Extremely Strong
• Profitability: Very Strong
• Financial Stability: Extremely Strong
• Downturn Resilience: Weak
• Overall: Very Strong
Taken together with its very low valuation, this makes the stock look very attractive, which supports our conclusion that FSLR is a very good stock to buy.
While FSLR stock looks promising, investing in a single stock can be risky. You could explore the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) to produce strong returns for investors. Why is that? The quarterly rebalanced mix of large-, mid- and small-cap RV Portfolio stocks provided a responsive way to make the most of upbeat market conditions while limiting losses when markets head south, as detailed in RV Portfolio performance metrics.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
