Core Viewpoint - First Solar Inc. (FSLR) has shown strong stock performance, gaining 29.4% over the past three months, outperforming both the solar industry and broader market indices [1][9]. Company Performance - FSLR's stock performance is attributed to aggressive expansion plans, including the start of operations at its fourth U.S. manufacturing facility in Q2 2025 [4]. - The company plans to add approximately four gigawatts (GW) of new capacity, aiming for an annual manufacturing capacity exceeding 25 GW by the end of 2026 [5]. - FSLR has entered contracts for the future sale of 66.1 GW of solar modules, valued at $19.8 billion, expected to contribute to revenue through 2030 [10]. Market Outlook - The growth prospects for FSLR are supported by ongoing capacity expansion and a strong demand outlook for solar energy [7]. - The Zacks Consensus Estimate for FSLR's long-term earnings growth rate is 34.5%, surpassing the industry's growth rate of 23.1% [11]. Financial Estimates - The Zacks Consensus Estimate indicates revenue growth of 18.2% and 18.3% for 2025 and 2026, respectively [15]. - Current estimates for FSLR's 2025 and 2026 revenues are $4.97 billion and $5.88 billion, respectively [16]. Valuation Metrics - FSLR shares are trading at a premium, with a forward Price/Sales (P/S F12M) ratio of 3.16, compared to the industry average of 1.27 [18]. - Competitors Canadian Solar (CSIQ) and SolarEdge Technologies (SEDG) are trading at lower P/S ratios of 0.13 and 1.30, respectively [19].

Core Viewpoint - First Solar Inc. (FSLR) has experienced a significant decline in its stock price, dropping 21.2% over the past six months, which is worse than the solar industry decline of 19.3% and the broader Zacks Oil-Energy sector growth of 5.3% [1][8] Performance Comparison - Other solar stocks, such as Canadian Solar (CSIQ) and SolarEdge Technologies (SEDG), have outperformed FSLR, with CSIQ losing 7.8% and SEDG gaining 15% in the same period [2] Reasons for Decline - FSLR's poor performance is attributed to weak first-quarter 2025 results, with earnings per share down 11.4% year-over-year and a significant drop in operating income [4] - Manufacturing issues with Series 7 modules produced in 2023 and 2024 have led to substantial warranty charges, estimated to be between $56 million and $100 million in the near future [5] - The imposition of a 10% "baseline" tariff on most trading partners, including key manufacturing regions, has raised costs and negatively impacted operational results, prompting a reduction in 2025 guidance [6][8] Future Outlook - Despite current challenges, FSLR is expanding its manufacturing capacity, with plans for a new facility expected to begin operations in the second half of 2025, aiming for 16% revenue growth in both 2025 and 2026 [9][10] - The Zacks Consensus Estimate projects a revenue increase of 16.3% for 2025 and 16.8% for 2026, alongside a long-term earnings growth rate of 34.5% [12][10] Near-Term Estimates - The Zacks Consensus Estimate for FSLR's 2025 revenue is $4.89 billion, with a year-over-year growth estimate of 16.28% [13] - Earnings per share estimates for 2025 have seen a downward revision, indicating reduced analyst confidence, with a projected EPS of 14.50 for 2025, reflecting a year-over-year growth of 20.63% [14] Valuation Comparison - FSLR shares are trading at a premium with a forward Price/Sales (P/S F12M) ratio of 2.92, compared to the industry average of 1.16 [15] - In contrast, peers CSIQ and SEDG are trading at lower P/S ratios of 0.10 and 0.83, respectively [17]

Financial Data and Key Metrics Changes - In 2024, First Solar reported net sales of $4.2 billion, a 27% increase year-on-year, with a diluted EPS of $12.02, up from $7.74 in 2023 [7][31][88] - Gross margin for the full year was 44%, an increase of 5 percentage points from 2023, but Q4 gross margin dropped to 37% from 50% in the prior quarter [21][22] - The company ended 2024 with a cash balance of $1.8 billion, an increase of $0.5 billion from the prior quarter [32] Business Line Data and Key Metrics Changes - First Solar sold a record 14.1 gigawatts of modules in 2024, with a year-end contracted backlog of 68.5 gigawatts valued at $20.5 billion [6][12] - Manufacturing output included 15.5 gigawatts, comprising 9.6 gigawatts of Series 6 modules and 5.9 gigawatts of Series 7 modules [8][10] - The company began producing CuRe modules in Q4 2024 and is on track to ramp up production capacity to over 25 gigawatts by 2026 [10][72] Market Data and Key Metrics Changes - The contracted backlog included 37.1 gigawatts with potential adjusters that could generate an additional $0.7 billion in revenue [15] - The total pipeline of potential bookings decreased to 80.3 gigawatts, with mid to late-stage opportunities at 21 gigawatts [15][16] - The company faced challenges in international markets due to policy uncertainties and competition, particularly in Europe and India [67][68] Company Strategy and Development Direction - First Solar's strategy focuses on technology differentiation, emphasizing thin-film technologies and a three-pillar approach to innovation [36][41] - The company aims to leverage its strong balance sheet to support growth and navigate macroeconomic uncertainties [85] - The management plans to continue a selective approach to contracting, prioritizing long-term relationships with customers [17][56] Management Comments on Operating Environment and Future Outlook - Management highlighted the need for decisive actions to address China's dominance in the solar supply chain and the importance of US manufacturing [51][52] - The uncertain policy environment post-US elections is causing caution among customers, impacting procurement and project timelines [60][62] - Despite near-term challenges, management remains optimistic about long-term growth in solar demand due to its low-cost profile and speed to deployment [60][61] Other Important Information - The company is constructing a $1.1 billion manufacturing facility in Louisiana, expected to begin operations in the second half of 2025 [11] - Warranty charges related to Series 7 manufacturing issues are estimated to range from $56 million to $100 million [23][84] - The company has filed a lawsuit against JinkoSolar for patent infringement, reinforcing its commitment to protecting its intellectual property [44] Q&A Session Summary Question: What are the expectations for module sales in 2025? - First Solar expects module sales of 18 to 20 gigawatts in 2025, with a significant portion produced in the US [75][90] Question: How is the company addressing the challenges in international markets? - The company is reducing output from its Southeast Asian factories due to policy uncertainties and is focusing on optimizing its domestic production capabilities [72][67] Question: What is the outlook for gross margin in 2025? - Gross margin is expected to be between 47% for the full year 2025, factoring in ramp costs and the impact of Section 45X tax credits [88][90]