Rising Investor Expectations Have Enabled First Solar Stock To Outperform The S&P

-3.10%
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Market
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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 at 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. Due to this, the company’s stock price has risen strongly, and has managed to outperform the S&P 500, which returned around 60% over the same period.

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) FSLR’s Total Revenue has risen 20% from $2.2 billion in FY 2018 to $2.7 billion currently

  • 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, but currently stands at $2.7 billion on an LTM basis.
  • 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 19% from $21.46 in FY 2018 to $25.62 currently

  • FSLR revenue rose from $2.2 billion in 2018 to $2.7 billion currently, while the outstanding share count increased from 104.6 million in 2018 to 105.5 million currently.
  • Due to this, RPS has risen from $21.46 in FY ’18 to $25.62 currently.

(C) Price-To-Sales (P/S) multiple for FSLR rose strongly from 2x in 2018 to 3.9x by 2020 end but has pulled back to 2.9x currently, still almost 1.5x higher than its 2018 level

  • FSLR’s P/S multiple rose strongly to around 3.9x by late 2020, on the back of rising investor expectations surrounding increased demand for its products, leading to a rise in the company’s sales.
  • However, due to the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 2.9x.
  • For additional details about the company stock returns and comparison to peers, see First Solar (FSLR) Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Jun 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 FSLR Return 2% -17% 125%
 S&P 500 Return 0% -14% 84%
 Trefis Multi-Strategy Portfolio 2% -18% 222%

[1] Month-to-date and year-to-date as of 6/6/2022
[2] Cumulative total returns since the end of 2016

 

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