FSLR Stock Down 13.8% in Three Months: What's Next for Investors?

Core Insights - First Solar, Inc. (FSLR) shares have decreased by 13.8% over the past three months, underperforming the Zacks Solar industry's decline of 9% [1] - The company is expanding its U.S. manufacturing capacity to capitalize on strong demand for its products [1][4] Demand and Expansion - First Solar is experiencing robust demand in the U.S., driven by the adoption of advanced thin-film solar modules [4] - The company has secured 2.7 gigawatts (GW) of additional gross bookings, raising its total backlog to 54.5 GW through 2030 [5] - First Solar has initiated operations at its fourth and fifth U.S. manufacturing plants and expanded capacity at its Ohio facilities [5][6] - Planned expansion includes a 3.7 GW U.S. module finishing line expected to start in Q4 2026, enhancing production capacity [6] Manufacturing Footprint - First Solar is establishing a $330 million facility in Gaffney, SC, for final production of Series 6 Plus modules [8] - A $1.1 billion AI-enabled manufacturing facility in Iberia Parish, LA, is expected to add 3.5 GW of annual capacity, increasing U.S. manufacturing to 14 GW in 2026 and 17.7 GW in 2027 [8] Financial Performance and Estimates - The Zacks Consensus Estimate for 2026 earnings per share (EPS) indicates a slight increase of 0.22% over the past 60 days, with a long-term earnings growth rate of 33.5% [9] - First Solar's trailing 12-month return on equity is 16.61%, surpassing the industry average of 11.48% [16] - The stock is currently trading at a forward P/E of 10.06X, which is a discount compared to the industry's 17.74X [17] Challenges - First Solar faces challenges from rising trade tensions and tariff risks, with U.S. tariffs ranging from 19% to 50% potentially affecting module sales and international operations [11] - The risk of global solar module oversupply due to aggressive capacity expansion in China may lead to price volatility and increased competition [12]