Can First Solar Shine Along With Rest of Its Industry Group?

Michael Teague |

solar stocks, solar power, solar stocks dropping, why did solar stocks fall, germany solar powerAnticipation surrounding First Solar, Inc. (FSLR) financials comes in the larger context of the revival of solar stocks over the last few months.  A number of solar stocks have posted strong growth over the last quarter, after a long period during which solar companies struggled: SunPower Corp. (SPWR) is up a whopping 197.75 percent, Trina Solar Limited (TSL) up 90.20 percent, JA Solar Holdings (JASO) up 55.4 percent, Canadian Solar Inc. (CSIQ) up 82 percent, while First Solar is actually lagging in this respect, up only 33.8 percent.

These strong performances can be attributed to a number of factors, such as increases in product efficiency (SunPower is an especially good example of this), and the opening up of new markets in South America and West Asia.  In terms of the U.S., dropping costs have also played a major role, allowing more businesses, for example, to purchase the panels that can provide power on the spot, independently of traditional utilities.

And costs must go down if solar power is to compete with the traditional grid power system.  This phenomenon has already occurred in Hawaii, where solar is actually the cheaper of the two, and is beginning to make its way into the rest of the United States, though it may yet be a while before it reaches the kind of widespread use that will cause significant changes to how energy is produced, bought, and sold.

This brings us back to FirstSolar, whose shares, by midday Tuesday, are down about 3 percent, trading at just under $32. The company is scheduled to announce fourth quarter results after the market close.  For Q4, the company is expected to bring in revenue of between $1.22 and $1.44 billion, with earnings-per-share estimated at $1.76. A little over a year ago, the company adjusted its focus to the creation of solar farms for utility companies, which caused worries about the company’s ability to make money in the future.  Furthermore, its panels are still about half as efficient as competitors like SunPower.  Last Friday, the stock was downgraded to “underperform” by Pacific Crest.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CSIQ Canadian Solar Inc. 12.96 0.40 3.18 2,179,087
FSLR First Solar Inc. 37.06 1.64 4.63 4,412,931
JASO JA Solar Holdings Co. Ltd. 6.02 0.05 0.84 515,677
SPWR SunPower Corporation 8.52 0.27 3.27 3,989,006
TMD.WT.A:CA Titan Medical Inc. June 2016 Warrants n/a n/a n/a 0
TSL Trina Solar Limited Sponsored ADR (Cayman Islands) 10.32 -0.11 -1.05 1,190,629

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