First Solar Stock Rises 19.2% in a Month: What Should Investors Do?

Core Insights - First Solar (FSLR) shares have increased by 19.2% over the past month, outperforming the Zacks Solar industry's growth of 14.3% [1][8] - The company is expanding its U.S. manufacturing capacity to meet high demand, particularly for its advanced thin-film solar modules [5][21] Performance Comparison - Other solar stocks, such as SolarEdge Technologies (SEDG) and Canadian Solar (CSIQ), have also shown strong performance, with SEDG shares rising by 16.7% and CSIQ shares gaining 98.5% in the same period [3] Demand and Manufacturing Expansion - First Solar is experiencing robust demand in the U.S. market, driven by interest in its solar modules and the increasing electricity consumption from AI-related data centers [5][21] - The company has recently started operations at its fourth and fifth manufacturing facilities in the U.S. and has a total booking backlog of 54.5 GW extending through 2030 [6][9] Production Capacity - In Q3 2025, First Solar produced 3.6 GW and sold 5.3 GW of solar modules, with a total nameplate production capacity of approximately 23.5 GW as of September 30, 2025 [7][9] Earnings Estimates - The Zacks Consensus Estimate for 2025 EPS indicates a decrease of 3.05%, while the estimate for 2026 EPS implies an increase of 2.8% over the past 60 days [10] Challenges - First Solar faces challenges such as heightened trade tensions and new tariffs imposed on countries where it manufactures, which could limit its ability to sell certain modules in the U.S. [12] - A potential global oversupply of solar modules, driven by capacity expansion in China, may lead to pricing volatility and competitive pressure [13] Financial Metrics - First Solar's trailing 12-month return on equity is 16.61%, higher than the industry average of 11.03% [17] - The stock is currently trading at a forward P/E of 12.15X, which is a discount compared to the industry's 18.39X [19] Investment Outlook - The strong U.S. demand for First Solar's products and ongoing capacity expansion support long-term revenue growth [21] - However, declining near-term earnings estimates may lead new investors to seek a better entry point, while current investors are advised to remain invested due to the higher ROE [22]