Buy the Surge in First Solar Stock Before It's Too Late?

Core Insights - First Solar (FSLR) is experiencing renewed excitement due to strong earnings potential driven by policy support, analyst upgrades, and solid business fundamentals [1] - The company is a significant beneficiary of the Inflation Reduction Act, which promotes clean energy investments, leading to increased long-term demand visibility [1] Production and Sales - First Solar's U.S. production facilities are sold out through 2028, specializing in cadmium telluride (CdTe) thin-film solar modules that outperform traditional silicon panels [2] - The stock has increased by approximately 10% this month and nearly 40% year-to-date, with a recent peak of $248 [2] Earnings Expectations - First Solar is expected to report Q3 results on October 30, with projected sales up 74% to $1.54 billion compared to $887.67 million in the same quarter last year [4] - Earnings per share (EPS) are anticipated to rise 46% to $4.24, up from $2.91 in Q3 2024 [4] Technical Analysis - The stock has shown strong performance since breaking above its 50-day and 200-day simple moving averages (SMAs) in July, with expectations of high double-digit growth in fiscal years 2025 and 2026 [5] - Current support levels for the 50-day and 200-day SMAs are approximately $169 and $210 per share, respectively [6] Valuation Metrics - FSLR trades at a forward earnings multiple of 16X, which is a discount compared to the S&P 500 and its solar peers, and is over 20% below its decade-long median of 21X [8] Analyst Upgrades - Analysts have recently raised their price targets for First Solar, with several now exceeding $260, and Citigroup having the highest target at $300 [9] Earnings Estimate Revisions - First Solar currently holds a Zacks Rank 3 (Hold), with positive EPS revisions over the last quarter, although there has been a slight dip in the last week for FY25 and FY26 [13]