First Solar Stock Has Returned 75% To Investors Since Late 2018: Here’s Why

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FSLR: First Solar logo
FSLR
First Solar

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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Returns Apr 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 FSLR Return -11% -14% 133%
 S&P 500 Return -3% -7% 97%
 Trefis Multi-Strategy Portfolio -4% -11% 250%

[1] Month-to-date and year-to-date as of 4/21/2022
[2] Cumulative total returns since the end of 2016

 

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