First Solar Stock Has Returned 2x More Than The S&P Since 2017, Despite Dropping Sales

-16.17%
Downside
130
Market
109
Trefis
FSLR: First Solar logo
FSLR
First Solar

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
Relevant Articles
  1. What’s Driving The Outperformance In Renewable Energy Stocks?
  2. Rising Investor Expectations Have Enabled First Solar Stock To Outperform The S&P
  3. First Solar Stock Has Returned 75% To Investors Since Late 2018: Here’s Why
  4. Forecast Of The Day: First Solar’s Solar Module Revenue
  5. Will Hydrogen Stocks Benefit As The E.U. Looks To De-Risk Gas Supplies?
  6. Forecast Of The Day: First Solar’s Solar Module Revenue

(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.

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 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

 

Invest with Trefis Market Beating Portfolios
See all Trefis Price Estimates