First Solar Stock Delivers Strong Cash Yield – Upside Ahead?

First Solar (FSLR) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With FSLR

FSLR stock is currently trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs and also below its 3-year average.

The stock may not reflect it yet, but First Solar posted record 2025 shipments, reaching $5.2 billion in net sales with $2.4 billion in net cash. While 2026 sales guidance missed expectations due to international facility underutilization and lower pricing, US expansion to 10 GW+ and a 50.1 GW backlog support its domestic leadership. However, 2025 saw negative 0.9 GW in net bookings. Despite this backlog erosion, the company’s policy-driven domestic scale remains a primary competitive advantage.

FSLR Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 5.6%, but First Solar stock does
• Strong Margin: Last 12 month operating margin of 30.6%
• Growth: Last 12 revenue growth of 24.1% – low growth, but this selection is all about high yield and margin
• Valuation: FSLR stock is currently trading at 34% below its 2Y high, 19% below its 1M high, and at a PS lower than the 3Y average.

Below is a quick comparison of FSLR fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While FSLR stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. First Solar (FSLR) didn’t escape damage either. The stock fell about 72% in the Global Financial Crisis, over 52% during the 2018 correction, and close to 49% in both the Covid pandemic and the recent inflation shock. Even with strong fundamentals, these dips show FSLR is not immune to big market swings. When stress hits, sharp drops happen, no matter how promising the outlook. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read FSLR Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell FSLR Stock.

Stocks Like FSLR

Not ready to act on FSLR? Consider these alternatives:

1. Elevance Health (ELV)
2. IQVIA (IQV)
3. General Mills (GIS)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few years average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed as follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

Portfolios Over Individual Stock Picks

Stocks soar and sink – the key is staying invested. A balanced portfolio helps you ride market volatility, boosts gains, and reduces single stock risk.

Beating the market consistently is hard, but the Trefis High Quality (HQ) Portfolio makes it look achievable. By selecting 30 high-conviction stocks, the HQ strategy has historically outpaced the S&P 500, S&P Mid-cap, and Russell 2000. See how this curated selection delivers superior risk-adjusted returns in our detailed performance factsheet.