First Solar (NasdaqGS:FSLR) Sees 31% Stock Price Surge Last Month

First Solar (NasdaqGS:FSLR) reported a mixed earnings result for Q1 2025, with sales increasing to $845 million but net income and earnings per share declining compared to the prior year. The company also adjusted its financial guidance downward, anticipating lower sales and earnings for the year. Despite these mixed results, First Solar's stock saw a 31% increase in value last month, a significant move compared to the flat performance of broader indices like the S&P 500. This growth occurred amidst volatile market conditions marked by flat major indexes, rising Treasury yields, and fluctuating Bitcoin prices.

You should learn about the 2 risks we've spotted with First Solar (including 1 which is significant).

Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.

The recent performance of First Solar's stock, rising sharply last month despite announced earnings declines and revised guidance, underscores the market's complex reactions. Such a substantial uptick in value may signal investor optimism about the company's longer-term strategic initiatives, such as domestic capacity expansion and entry into the Indian market. Over the last five years, First Solar achieved a striking total return of 259.15%, reflecting strong historical performance even as it faced recent volatility.

Comparatively, over the past year, the company's shares lagged behind both the US market and its semiconductor industry peers, hinting at broader competitive pressures and possibly impacting investor sentiment. The latest earnings announcement and guidance revisions may affect future revenue and earnings forecasts, casting uncertainty on whether the company can maintain anticipated growth trajectories. Analysts project future earnings growth, but it hinges on overcoming trade and tariff challenges, which could impair revenue streams from critical markets.

Despite substantial price movement, currently priced at US$126.76, the share remains noticeably below the consensus price target of US$195.59. This discount indicates potential undervaluation, yet achieving the target relies on meeting ambitious future growth in earnings and revenue. Stakeholders should remain cautious of external trade dynamics and operational hurdles that can influence these forecasts, while the company’s strategies unfold.

Insights from our recent valuation report point to the potential undervaluation of First Solar shares in the market.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com