Why is First Solar (FSLR) up 53.3% since its last earnings report?

A month has passed since First Solar’s (FSLR) last earnings report. The stock has risen about 53.3% in that time, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is First Solar facing a pullback? Before we dive into the recent reaction from investors and analysts, let’s take a quick look at the company’s most recent earnings report in order to get a better handle on the important factors influencing the situation.

First-quarter solar earnings exceeded estimates, sales increased y/y

First Solar reported first-quarter 2024 earnings of $2.20 per share, a massive 450% increase from the prior-quarter earnings of 40 cents per share. The bottom line beat the Zacks Consensus Estimate of $1.90 by 15.8%.

Sales update

First Solar’s first-quarter net sales were $794.1 million, an 11.1% beat of the Zacks Consensus Estimate of $715 million. Earnings also improved 44.8% compared to $548.3 million in the year-ago quarter.

Operational highlights

In the first quarter, the company’s gross profit was $346 million, an improvement of a solid 208.8% compared to $112.1 million in the same quarter last year.

Total operating expenses increased 10.6% year-over-year to $104 million due to higher research and development costs, as well as selling, general and administrative expenses.

FSLR reported operating income of $243.1 million, compared to operating income of $18 million in the year-ago quarter.

Financial result

First Solar had $1.68 billion in cash and cash equivalents as of March 31, 2024, compared to $1.95 billion as of December 31, 2023.

Total long-term debt was $418.7 million as of March 31, 2024 compared to $464.1 million as of December 31, 2023.

Guidelines 2024

First Solar maintained most of its guidance for 2024. FSLR continues to expect to post earnings in the range of $13-$14 per share in 2024. The Zacks Consensus Estimate for FSLR’s 2024 earnings is projected at $13.57 per share, which is above the midpoint of the company’s projected range.

FSLR continues to forecast its sales in the range of $4.4 billion to $4.6 billion in 2024. The Zacks Consensus Estimate for this range is $4.5 billion, which is in the middle of the company’s stated range.

First Solar still expects gross profit in the range of $2.0 billion to $2.1 billion. Its operating income is estimated at $1.5-1.6 billion.

Meanwhile, the company continues to expect module shipments in the range of 15.6-16.3 gigawatts in 2024. First Solar increased its 2024 capital spending guidance to the range of $1.8-2.0 billion from the previous range of 1 .7-1.9 billion dollars.

How have estimates changed since then?

Over the last month, investors have seen a downward trend in estimate revisions.

As a result of these changes, the consensus estimate moved by -8.48%.

VGM results

Right now, First Solar has an average growth score of C, which means the same momentum score. Following exactly the same trajectory, the stock is rated C for Value, ranking in the middle 20% for this investment strategy.

Overall, the stock has a Total VGM Score of C. If you’re not focused on one strategy, this score should interest you.

Perspectives

Estimates for this company are generally on a downward trend, and the magnitude of these revisions indicates a downward shift. Notably, First Solar carries a Zacks Rank #3 (Hold). We expect a linear rate of return on the stock over the next few months.

Industry player performance

First Solar is part of the Zacks Solar industry. Over the past month, Enphase Energy (ENPH), a stock in the same industry, has gained 23.2%. More than a month ago, the company published its results for the quarter ended March 2024.

Enphase Energy reported revenue of $263.34 million in the most recent quarter, representing a year-over-year change of -63.7%. EPS of $0.35 for the same period compared to $1.37 a year ago.

Enphase Energy is expected to report earnings per share of $0.51 for the current quarter, which would represent a year-over-year change of -65.3%. Over the past 30 days, the Zacks Consensus Estimate has moved -9.4%.

Enphase Energy earns a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Rating of F.

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