Will First Solar Weather the Tariff Headwinds and Shine Again?

Core Viewpoint - First Solar Inc. has lowered its full-year 2025 earnings guidance due to challenges from recent U.S. import tariffs, now expecting earnings between $12.50 and $17.50 per share, down from $17.00 to $20.00 [1][9] Financial Projections - Revenues are now projected to be between $4.50 billion and $5.50 billion, a decrease from the previous range of $5.30 billion to $5.80 billion [2] - Expected module shipments have been lowered to 15.5-19.3 gigawatts (GW) [2] Tariff Impact - The implementation of double-digit reciprocal tariffs on India, Malaysia, and Vietnam is a significant economic headwind for First Solar, potentially reducing U.S.-bound demand and leading to production slowdowns [3] - Sustained pressure from tariffs could result in partial shutdowns, affecting the company's near-term operational performance [3] Long-term Outlook - Despite short-term challenges, First Solar's long-term growth prospects remain strong due to its vertically integrated U.S. manufacturing, established footprint in the U.S. solar market, and a robust domestic supply chain [4] - The Zacks Consensus Estimate for First Solar's long-term earnings growth rate is 34.5%, above the industry's average of 23.1% [5] Industry Context - Other solar stocks, such as Canadian Solar Inc. and JinkoSolar, are also facing pressure from increased tariffs on solar equipment imports from China and Southeast Asia, leading to reduced demand and sales [6][7] Stock Performance and Valuation - First Solar shares have declined by 43.9% over the past year, compared to a 45% decline in the industry [8] - The company's shares are trading at a forward Price/Earnings ratio of 9.26X, significantly lower than the industry's average of 15.66X [10] - The Zacks Consensus Estimate for First Solar's near-term earnings has decreased over the past 60 days [11]