A Financial Analysis and Valuation of First Solar, Inc.

Abstract

First Solar is an American company specializing in thin-film photovoltaic solar solutions using Cadmium Telluride (CdTe) technology. This technology offers environmental protection and sustainability advantages. The company maintains market competitiveness through continuous technological improvements, enhanced efficiency and durability, and expanded production capacity. First Solar holds significant market share in the United States and India, aided by government incentives like the U.S. Inflation Reduction Act and Indias Production-Linked Incentive Program. The company is expanding globally through acquisitions and long-term agreements, with plans to build new factories in both countries to boost production. Financially, First Solar performs well in liquidity, solvency, and profitability, ranking in the upper-middle tier among industry competitors. Its healthy short-term debt solvency is indicated by strong current and quick ratios, while its low debt ratio and high interest coverage ratio highlight robust long-term debt solvency. The companys gross and net profit margins are stable and expected to grow. First Solars earnings per share (EPS) and revenue growth rates surpass those of its peers, and its price-to-earnings (P/E) and earnings growth (PEG) ratios suggest lower relative future earnings growth, enhancing investment appeal. In summary, First Solar demonstrates strong market competitiveness and growth potential with its advanced technology, sustainable business model, and solid financial performance, positioning it as a leader in the solar energy industry.