First Solar
| CURRENT PRICE | PROBABILITY-WEIGHTED FAIR VALUE | FAIR VALUE RANGE |
|---|---|---|
| $229.44 | ~$275 | $200 – $380 |
| Close 5/1/26 area | Bull 25% / Base 50% / Bear 25% | ~25% upside to weighted FV |
Verdict: FSLR is the highest-quality, lowest-multiple solar pure-play. Q1 2026 delivered revenue $1.04B (+24%), GAAP EPS $3.22 (+65%), and Adj EBITDA $520M with 47% gross margin[1]. The company reaffirmed full-year guidance of $4.9-5.2B revenue and $2.6-2.8B Adj EBITDA. At forward P/E of 10.6x and EV/EBITDA of 8.7x[2] — half the market multiple — FSLR offers utility-scale solar exposure with Section 45X manufacturing credits, net cash balance sheet ($2.5B), and US-onshored production. Our blended FV of ~$275 implies ~25% upside; consensus PT is $247[3].
CURRENT SNAPSHOT
| Metric | Value | Notes / Source |
|---|---|---|
| Stock price | $219 | Approx; post Q1 beat [4] |
| Market cap | $21.0B | [2] |
| Enterprise value | $18.5B | Net cash $2.5B [2] |
| Diluted shares | ~107M | [2] |
| Q1 2026 revenue | $1.04B (+24%) | 31% volume growth offset by India ASP [1] |
| Q1 2026 Adj EBITDA | $520M | 47% gross margin [1] |
| Q1 2026 GAAP EPS | $3.22 (+65%) | [1] |
| FY26 revenue guide | $4.9B – $5.2B | Reaffirmed [5] |
| FY26 Adj EBITDA guide | $2.6B – $2.8B | [5] |
| Forward P/E | 10.6x | [2] |
| EV/EBITDA | 8.7x (NTM ~6.8x) | Inexpensive on growth [6] |
| Consensus PT | $247 | 48 analysts; Buy consensus [3] |
MACRO CONTEXT — RATES & MARKET LEVELS
US utility-scale solar deployment continues at record pace, supported by IRA tax credits and AI data center power demand. 10-yr UST at 4.68%[7] pressures cap rates for solar developers but does not directly hit FSLR's module-sale margins. S&P at 21x forward[8] provides relative-value contrast. Implication for FSLR: FSLR's contracted backlog (>70 GW) and Section 45X credits provide multi-year revenue visibility. The discount to market multiples is partly explained by ASP risk and policy uncertainty — but the cash generation and balance sheet strength offer significant downside cushion.
METHODOLOGY
Three lenses (FY26E): (1) P/E on FY26E EPS (~$20.50 implied from EBITDA range), (2) EV/EBITDA on FY26E (mid $2.7B EBITDA), (3) EV/EBITDA on FY27E assuming +15% growth (~$3.1B EBITDA). Net cash $2.5B held flat; shares 107M. Weights: Bull 25% / Base 50% / Bear 25%.
BULL / BASE / BEAR SCENARIOS
| Scenario (weight) | P/E on FY26E EPS | EV/EBITDA on FY26E | EV/EBITDA on FY27E | Blended FV |
|---|---|---|---|---|
| Bull (25%) ASPs stabilize, India scale-up adds revenue, multiple re-rates to 14x |
18x → $369 | 13x → $352 | 12x → $369 | ~$365 |
| Base (50%) Hit FY26 guide, +15% in FY27, multiple stays near current levels |
13x → $267 | 10x → $275 | 9x → $284 | ~$275 |
| Bear (25%) ASP pressure intensifies, India dilutes mix, multiple compresses |
8x → $164 | 7x → $200 | 6x → $197 | ~$190 |
| Probability-weighted | ~$267 | ~$275 | ~$278 | ~$275 |
Blended fair value (~$275) = simple average of the three method-level probability-weighted outputs ($267 / $275 / $278). Range $200-$380 spans bear-to-bull. Wall Street avg PT $247 sits between our base case and the bear case midpoint.
PEER COMPARISON
| Company | Fwd P/E | Rev Growth | Notes |
|---|---|---|---|
| First Solar (FSLR) | ~11x | +24% Q1 | Utility-scale; Section 45X; net cash [2] |
| Enphase (ENPH) | ~14x | -21% Q1 | Residential; profitable but declining |
| SolarEdge (SEDG) | n/m → 22x | +46% Q1 | Turnaround; high beta |
| NextEra (NEE) | ~22x | +8% | Utility/IPP; project developer |
| Brookfield Renewable | ~25x | +10% | Project portfolio; yield component |
| Jinko / LONGi (China) | ~6-8x | varies | Asian competitors; ASP pressure |
FSLR's 11x forward P/E is anomalously low for a US-onshored manufacturer with 25%+ growth and 50%+ gross margins. The discount reflects: (1) ASP risk from Chinese oversupply, (2) policy uncertainty on Section 45X credits, and (3) limited resi exposure. Each of these is a real risk but the cash generation already locks in significant value.
Key Risks & Watch Points
- ASP risk: Module pricing remains pressured; India deliveries at ~$0.20/W reflect mix risk.
- Section 45X credit: Policy reversal or modification would materially impact economics.
- Customer concentration: Backlog concentrated in handful of large utility customers; pushouts can lump revenue.
- Trade/tariff: Chinese module dumping cases and trade policy whiplash.
- Technology: Thin-film vs. crystalline silicon efficiency gap; ongoing R&D risk.
- Working capital: Long manufacturing cycle ties up cash even with strong P&L.
What Would Change Our View
- Upside: FY26 guide raise, Section 45X clarity, ASP stabilization, AI data center demand catalysts for utility solar.
- Downside: FY26 guide cut, ASP collapse, Section 45X reduction, major backlog cancellation, China module surge.
Sources
[1] https://www.sec.gov/Archives/edgar/data/0001274494/000127449426000108/ex991pressreleaseq1-2026.htm
[2] https://stockanalysis.com/stocks/fslr/statistics/
[3] https://www.marketbeat.com/stocks/NASDAQ/FSLR/forecast/
[4] https://finance.yahoo.com/quote/FSLR/
[6] https://www.gurufocus.com/term/enterprise-value-to-ebitda/FSLR
[7] https://fred.stlouisfed.org/series/DGS10
[8] https://insight.factset.com/sp-500-earnings-season-update-may-8-2026
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