What a time it’s been for First Solar. In the past six months alone, the company’s stock price has increased by a massive 71.8%, reaching $268.40 per share. This run-up might have investors contemplating their next move.
Following the strength, is FSLR a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free for active Edge members.
Why Is FSLR a Good Business?
Headquartered in Arizona, First Solar (NASDAQ:FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.
1. Long-Term Revenue Growth Shows Momentum
A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, First Solar’s 7.6% annualized revenue growth over the last five years was decent. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
First Solar’s EPS grew at an astounding 44.2% compounded annual growth rate over the last five years, higher than its 7.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, First Solar’s margin expanded by 13.9 percentage points over the last five years. First Solar’s free cash flow margin for the trailing 12 months was 12.2%.
Final Judgment
These are just a few reasons why we're bullish on First Solar, and with the recent rally, the stock trades at 12.2× forward P/E (or $268.40 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free for active Edge members.
Stocks We Like Even More Than First Solar
Fresh US-China trade tensions just tanked stocks—but strong bank earnings are fueling a sharp rebound. Don’t miss the bounce.
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