Assessing First Solar (FSLR) Valuation After Strong Share Price Gains and Renewed Investor Optimism

First Solar (FSLR) shares have steadily climbed in recent months, drawing fresh attention from investors interested in the solar industry’s outlook. The company’s performance points to ongoing optimism, even as market sentiment continues to shift within the renewable energy sector.

See our latest analysis for First Solar.

First Solar’s 31% share price return over the past three months has generated plenty of buzz, especially given a year-to-date surge of 35% and a one-year total shareholder return of 36%. This momentum suggests that investors are warming up to the company’s long-term growth story as market optimism for renewables picks up again.

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With shares climbing rapidly, the big question is whether First Solar still trades below its true worth or if the stock’s future growth is already fully reflected in current prices, potentially leaving limited room for upside.

Most Popular Narrative: 6.5% Undervalued

First Solar’s fair value is set at $269.64 in the most widely followed narrative, modestly above the last close at $252.19. This sets up a debate about whether recent momentum is fully justified or if real upside remains.

“Recent U.S. policy changes, specifically, strengthened incentives and tighter restrictions against foreign entities of concern (such as China) under the new reconciliation legislation, are boosting First Solar's competitive moat, supporting robust demand for domestically produced modules, and enabling the company to capture higher long-term contracted pricing, directly improving forward revenue visibility and gross margins.”

Read the complete narrative.

What is the real driver behind this valuation? The focus is on bold profit growth projections, expanding margins, and a premium placed on manufacturing edge. Curious if those assumptions hold up or break under scrutiny? Discover exactly how these key figures shape the narrative’s fair value estimate.

Result: Fair Value of $269.64 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent industry uncertainty around tariffs and shifting policy incentives could quickly challenge First Solar's growth story and put pressure on its margins in the future.

Find out about the key risks to this First Solar narrative.

Build Your Own First Solar Narrative

If you have your own perspective or want to dig deeper than the prevailing view, you can analyze the numbers yourself and craft a unique forecast in just minutes with Do it your way.

A great starting point for your First Solar research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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