First Solar (NasdaqGS:FSLR) Drops 12% Despite Reporting Strong Earnings Growth

First Solar (NasdaqGS:FSLR) reported significant earnings and sales growth for both Q4 and the full year of 2024, and offered optimistic guidance for 2025. Over the last week, the company's share price declined 12%, despite its robust financial performance. This movement coincided with a broader market decline, including tech-focused indices like the Nasdaq Composite, which fell 3.5%. The stock market last week reflected investor concerns over inflation, geopolitical tensions, and the prospect of new tariffs under the Trump administration, which overshadowed company-specific successes. Additionally, the overall market was affected by a sell-off in technology stocks, following Nvidia's earnings report that pressured related sectors. Despite the broader market downturn, the easing inflation report later in the week provided some cautious optimism, although it did not significantly alter the negative trajectory of certain stocks, including First Solar.

Take a closer look at First Solar's potential here.

First Solar has seen a remarkable total return of 214.00% over the past five years. This performance highlights the company's resilience and strategic growth, even though it fell short against the US market and the semiconductor industry over the past year. A key contributor to this long-term return is First Solar's consistent profit growth, with a significant annual earnings increase of 42.5% over the period. Also, the company's ability to secure substantial orders, such as the 2.1 gigawatts deal with Matrix Renewables in October 2023, has bolstered its market position.

Further supporting this growth was the substantial expansion in manufacturing capabilities and research facilities, especially with the US$1.1 billion investment in a new Alabama facility announced in August 2024. Additionally, the ongoing strong financial performance, with net income rising to US$1.29 billion by 2024, has reinforced the stability and appeal of First Solar's shares over the long term.

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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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