First Solar, Inc. (FSLR): A Bull Case Theory

We came crossed a bullish thesis on First Solar, Inc. connected r/Valueinvesting by u/sagotici. In this article, we volition summarize the bulls’ thesis connected FSLR. First Solar, Inc.'s stock was trading astatine $241.36 arsenic of January 13th. FSLR’s trailing and guardant P/E were 18.25 and 10.43 , respectively according to Yahoo Finance.

First Solar, Inc., a star exertion company, provides photovoltaic (PV) star vigor solutions successful the United States, France, India, Chile, and internationally. The institution manufactures and sells PV star modules with a bladed movie semiconductor exertion that provides a lower-carbon alternate to accepted crystalline silicon PV star modules.

First Solar is often misunderstood by the market, which tends to framework the banal arsenic babelike connected residential star incentives similar the Investment Tax Credit, adjacent though that programme is becoming little applicable to the company’s existent economics. The existent operator is Section 45X, which provides manufacturing taxation credits, allowing First Solar to gain astir $0.17 per watt simply for producing panels successful the United States, creating a durable borderline vantage that is autarkic of rooftop demand.

The institution is positioned squarely successful inferior standard solar, wherever agelong word outgo per kilowatt hr matters acold much than header terms per watt. This favoritism is captious arsenic astir caller request is coming from ample standard projects tied to information centers, galore of which are being built successful blistery regions specified arsenic Texas, Arizona, and Nevada. In these environments, accepted silicon panels suffer ratio arsenic temperatures rise, portion First Solar’s cadmium telluride exertion performs materially better, generating 5% to 10% much vigor annually and resulting successful a superior levelized outgo of vigor implicit a multi decennary lifespan.

Concerns astir task delays specified arsenic the Esmeralda cancellation, are besides misplaced, arsenic the fragmentation into aggregate smaller projects has accrued urgency among developers who cannot spend customs delays tied to Chinese sheet imports.

First Solar benefits further from having nary vulnerability to polysilicon proviso chains, which are heavy concentrated successful China and taxable to forced labour enforcement astatine the US borders. Its closed loop recycling program, which recovers implicit 90% of semiconductor materials, reinforces some outgo and regulatory advantages.

Looking ahead, the acquisition of Evolar and ongoing tandem perovskite pilots constituent to a credible way toward materially higher ratio successful the adjacent procreation of panels. With its backlog sold retired done 2029, beardown margins, and wide absorption connected inferior standard deployment wherever request is structurally growing, First Solar is positioned to payment adjacent arsenic commodity sheet prices proceed to compress crossed the broader star industry.