First Solar, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that First Solar, Inc. (NASDAQ:FSLR) released its first-quarter result to the market. The early response was not positive, with shares down 7.2% to US$127 in the past week. Statutory earnings per share fell badly short of expectations, coming in at US$1.95, some 21% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$845m. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on First Solar after the latest results.

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Taking into account the latest results, the current consensus from First Solar's 33 analysts is for revenues of US$5.05b in 2025. This would reflect a decent 19% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 27% to US$14.95. Before this earnings report, the analysts had been forecasting revenues of US$5.48b and earnings per share (EPS) of US$18.04 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

See our latest analysis for First Solar

It'll come as no surprise then, to learn that the analysts have cut their price target 13% to US$200. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values First Solar at US$304 per share, while the most bearish prices it at US$100.00. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the First Solar's past performance and to peers in the same industry. It's clear from the latest estimates that First Solar's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 6.7% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect First Solar to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for First Solar. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple First Solar analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for First Solar (1 is concerning!) that we have uncovered.

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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.