First Solar (NASDAQ: FSLR) is the largest US-based solar module manufacturer, specializing in thin-film cadmium telluride (CdTe) technology. Unlike many Chinese competitors, First Solar benefits from US protectionist policies (Section 201 tariffs, IRA domestic content bonuses) and has a multi-year backlog of over 70 GW. The company is investing heavily in US manufacturing capacity, with new factories in Ohio and Alabama coming online in 2025-2026.
Thesis
First Solar is at the cusp of a significant earnings inflection driven by: (1) the ramp of Series 7 modules with higher efficiency and lower cost, (2) the start of production at the new Alabama facility, (3) continued strong demand from US utility-scale developers seeking domestic content to qualify for IRA tax credits, and (4) potential upside from anti-circumvention tariffs on Chinese imports. With a net cash balance sheet and growing free cash flow, the company is well-positioned to return capital to shareholders.
12-Month Catalysts
- Q2 2025 earnings beat and raised guidance as Series 7 production ramps
- Finalization of IRA domestic content guidance, boosting demand for US-made modules
- New multi-year contracts with major US utilities
- Potential share buyback or dividend initiation
Key Risks
- Policy risk: Changes to IRA or tariffs could reduce competitive advantage
- Execution risk: Manufacturing ramp delays or cost overruns at new factories
Valuation
First Solar trades at ~15x 2025 consensus EPS of $13.50, with EPS expected to grow to $18+ in 2026. This is a discount to historical multiples and to growth peers. A 20x multiple on 2026 EPS implies a stock price of $360, representing ~35% upside.
Balance Sheet
As of Q1 2025, First Solar had $2.0 billion in cash and marketable securities against $0.5 billion in debt, for a net cash position of $1.5 billion. The company generates positive free cash flow and has no near-term maturities.
Disclaimer: This is not financial advice. Investing involves risk, including loss of principal. Past performance does not guarantee future results. Do your own research.