First Solar Stock Has Returned 2x More Than The S&P Since 2017, Despite Dropping Sales
First Solar Inc. (NASDAQ: FSLR) stock price jumped more than 2x from around $67 at 2017 end to $135 currently, primarily due to favorable changes in its P/S multiple. Additionally, the company witnessed a drop in revenue over this period, and revenue per share has, in fact, decreased, combined with a marginal rise in the outstanding share count. Despite this, the company’s stock price has risen strongly, and has managed to outperform the S&P 500, which returned around 50% over the same period.
In our interactive dashboard, Why First Solar Stock Moved: FSLR Stock Has Gained 101% Since 2017, we break down the factors behind this move.
(A) FSLR’s Total Revenue has dropped 16% from $2.9 billion in FY 2017 to $2.5 billion currently
- FSLR’s total revenue growth has been mixed over the years, with sales first dropping to $2.2 billion in FY ’18, before rising to $3.1 billion in FY ’19 and hovering around that level till FY ’21, where sales stood at $2.9 billion. However, LTM sales currently stand lower at $2.5 billion.
- 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) decreased 18% from $28.24 in FY 2017 to $23.10 currently
- FSLR’s revenue dropped from $2.9 billion in FY 2017 to $2.5 billion currently, and the outstanding share count rose from 104.2 million in FY 2017 to around 107 million currently.
- Due to this, RPS has dropped around 18% from $28.24 in FY ’17 to $23.10 currently.
(C) Price-To-Sales (P/S) multiple for FSLR dropped initially from 2.4x in 2017 to 1.9x by 2019 end, but has bounced back to 5.9x currently, almost 2.5x more than its 2017 level
- FSLR’s P/S multiple dropped to around 1.9x by late 2019, on the back of falling investor expectations surrounding the sustainability of demand for its products.
- However, with the tide turning due to the increased adoption of solar energy products, expectations are back up and the P/S multiple currently stands much higher at 5.9x.
- For additional details about the company stock returns and comparison to peers, see First Solar (FSLR) Stock Return Comparison.
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| Returns | Sep 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| FSLR Return | 6% | 55% | 321% |
| S&P 500 Return | 3% | -15% | 82% |
| Trefis Multi-Strategy Portfolio | 4% | -14% | 241% |
[1] Month-to-date and year-to-date as of 9/9/2022
[2] Cumulative total returns since the end of 2016
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