First Solar Stock Has Returned 75% To Investors Since Late 2018: Here’s Why
First Solar Inc. (NASDAQ: FSLR) stock price jumped more than 75% from around $42 in 2018 end to $75 currently, primarily due to favorable changes in its P/S multiple. Additionally, the company witnessed a steady rise in revenue over this period, and revenue per share has increased, despite a marginal rise in the outstanding share count.
In our interactive dashboard, Why First Solar Stock Moved: FSLR Stock Has Gained 76% Since 2018, we break down the factors behind this move.
(A) First Solar’s Total Revenue has grown 30% from $2.2 billion in 2018 to $2.9 billion on an LTM basis
- FSLR’s total revenue has seen a steady rise over the past few years, with a gradual increase from $2.2 billion in FY ’18 to $2.9 billion in FY ’21, and currently stands at around the same level.
- The company is a leading manufacturer of solar panels, and provider of utility-scale PV (photo-voltaic) power plants.
- As of FY ’21, sales from modules make up around 80% of the company’s sales, standing at $2.33 billion, up from $1.46 billion in FY ’19, a jump of almost 60% in just two years.
- For details about FSLR revenues and comparison to peers, see First Solar (FSLR) Revenue Comparison
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(B) Revenue per share (RPS) increased 28% from $21.46 in 2018 to $27.37 currently
- FSLR revenue rose from $2.2 billion in 2018 to $2.9 billion currently, while the outstanding share count increased from 104.6 million in 2018 to 106.8 million currently.
- Due to this, RPS has risen from $21.46 in FY ’18 to $27.37 currently.
(C) Price-To-Sales (P/S) multiple for FSLR rose strongly from 2.1x in 2018 to 4x by 2020 end, but has pulled back to 2.7x currently, still around 30% higher than its 2018 level
- Due to FSLR’s strong performance between 2018-end to 2021, its P/S multiple rose steadily from 2.1x in 2018 to as high as 4x in late-2020, on the back of rising investor expectations surrounding a continued rise in demand for the company’s products.
- However, despite the recent jump in sales, current geopolitical tensions have led to increased uncertainty in the broader markets, and the P/S multiple has pulled back, currently standing at around 2.7x.
- For additional details about the company stock returns and comparison to peers, see First Solar (FSLR) Stock Return Comparison.
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