First Solar Stock Has Outperformed The Broader Markets – Here’s Why

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FSLR: First Solar logo
FSLR
First Solar

First Solar Inc. (NASDAQ: FSLR) stock price jumped more than 3.5x from around $42 at 2018 end to $153 currently, primarily due to favorable changes in its P/S multiple. Additionally, the company witnessed just a 12% rise in revenue over this period, and revenue per share 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 262% Since 2018, we break down the factors behind this move.

(A) FSLR’s Total Revenue has grown 12% from $2.2 billion in FY 2018 to $2.5 billion currently

  • FSLR’s total revenue growth has been mixed over the years, with sales first 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 its most recent full-year 2021 earnings, 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 11% from $21.37 in FY 2018 to $23.62 currently

  • FSLR’s revenue rose from $2.2 billion in FY 2018 to $2.5 billion currently, and the outstanding share count rose from 105 million in FY 2018 to around 107 million currently.
  • Due to this, RPS has grown 11% from $21.37 in FY ’18 to $23.62 currently.

(C) Price-To-Sales (P/S) multiple for FSLR has risen strongly from 2x at 2018 end to 6.5x currently, a jump of more than 3x over its 2018 level

  • FSLR’s P/S multiple dropped marginally 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 surging adoption of solar energy products, expectations are back up and the P/S multiple currently stands much higher at 6.5x.
  • 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 Nov 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 FSLR Return 8% 81% 391%
 S&P 500 Return 4% -16% 79%
 Trefis Multi-Strategy Portfolio 8% -16% 232%

[1] Month-to-date and year-to-date as of 11/15/2022
[2] Cumulative total returns since the end of 2016

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