Solar Equity Intelligence

First Solar Q4 Earnings & 2025 Outlook released: Q4 EPS:?$3.65?(vs. $4.84 SEI est.) 2025 EPS Guidance:?$17.00–$20.00?(midpoint $18.50 vs. $20.40 estimate) Tariffs are starting to have an effect in 2025, but not in a major way. Guidance midpoint of 18.50 EPS would still be a strong result with 54% YoY growth. Shares up 4% pre-market. Results were below our estimates, but market expectations seem to be even lower.

SolarEdge Technologies jumps 20%+ after Q4 earnings, slightly beating on revenues and missing on earnings due to inventory re-evaluation. The key reason behind the jump is visible on the cash flow statement, recording $26M of free cash flow during the last quarter, compared with -20M to 0M guided in previous quarter. Positive cash flow is projected for 2025 as well. Sell-through was $400M during the quarter, still twice the revenues. The solar sector’s valuation ratios have dropped significantly, expectations for positive outcomes are low.

First Solar EPS estimates have come down but so has the share price. Based on our projections, First Solar could trade at a P/E ratio of 7.8 using estimated 2025 profits. If policy updates align with our expectations, the P/E ratio could fall below 5 by 2027. Even excluding domestic manufacturing credits (IRA Section 45X), we see First Solar being valued at 10.5 times adjusted earnings in 2027, which does not seem expensive given long-term demand catalysts like AI data centers and the fact that nearly all of its 2027 production capacity is already booked. Note:?Our adjusted P/E excludes the IRA Section 45X credit. In our base case, we assume a 10% reduction in these credits, reflecting increased risks under Trump presidency.

First Solar relies on cadmium telluride (CdTe) as the key material for its thin-film solar modules, while most of its supply currently comes from the US and Canada. Possible implications from the current trade war: ?? China’s export controls on tellurium and CdTe compounds could tighten global supply and drive up costs. ?? US tariffs on Canada under Trump's trade policies drive up cost of CdTe imports. At the current time, investors should pay more attention on how the company secures raw materials and manages cost pressures. First Solar has hedged most of its raw material costs with floating pricing, but these shifts could impact future margins.

We just published our quarterly report for First Solar and set our price target at $248, 33% upside from the last closing price of $187. Despite heightened risks compared to an alternative election outcome, we believe the market is overly cautious regarding the prospects of First Solar at its current share price. Here are the report highlights: ? Trump’s win brought share price decline as expected, but performance slightly better than peers. ? Due to high uncertainty, our base case scenario accounts for a 10% reduction in Section 45X credits, although there is a reasonable likelihood that no cuts will occur. ? Outlook for the US and Indian markets has slightly deteriorated – we reduced our total sold volume guidance for 2030 from 40 GW to 36 GW. ? Our EPS estimate for 2028 has been reduced by 10%. ? Forward P/E for 2025 stands at 9.2 and 4.7 for 2028. ? Even excluding Section 45X credits, the P/E could reach 10 in 2028. SEI is committed to a transparent research in the solar sector. Report is freely available for everyone at https://lnkd.in/d63bxkkt

First Solar released Q3 results yesterday, lowering full-year guidance for revenue and profit due to several factors, including delays from shifting some production from India to the US and a contract termination by Plug Power. Gross bookings were at 0.8 GW, which aligned with expectations due to the upcoming elections. India’s market environment has weakened and shipping to the US may only be a temporary solution, as there are oversaturation risks when all US factories are fully operational. Although, we believe First Solar is still undervalued at the current moment. Revenue $0.9B, vs SEI est. of $1.1B Net profit $0.31B vs SEI est. of 0.33B FSLR shares have declined 1.5% since the earnings release.

First Solar's stock is down 9% today, trading at $205, due to increasing odds of a Trump win in the upcoming election. Just a week ago, the odds were evenly split between the candidates, but now, Trump’s winning odds have risen to 54.9%, compared to 44.4% for Harris—a 10.5% gap, according to Polymarket. Over the past week, this shift has resulted in First Solar losing 12.8% of its market value, while the S&P 500 has gained 1.5%. By comparing First Solar’s share price movements to changes in Polymarket's odds throughout the campaign, we believe the market is overreacting to the most recent developments. The current valuation seems to suggest that the market is overly confident in a Trump victory. Any positive developments for Harris could easily trigger a recovery in First Solar's share price, given the current sentiment.

ABO Energy - Profitable since 1996 ?? We had the opportunity to ask key questions to ABO Energy and conducted a brief analysis of the German renewable energy development company. Founded in 1996, ABO Energy has delivered profits every single year for nearly three decades—an outstanding achievement in the renewable sector. Even though “you’ll never make money with that” was one of the most frequent phrases the founder, Jochen Ahn recalled, before starting the business. While most renewable energy developers focus on specific geographical markets, ABO Energy has done the opposite and succeeded. Today, the company operates in 16 countries across four continents. What began with onshore wind has since expanded to include solar (2017), batteries (2020), and most recently, hydrogen (2023). Read the full article here: https://lnkd.in/gAie2QeW

A 33% increase in global solar installations is expected this year. Yet, overcapacity continues to pressure module manufacturers, especially in Asia and Europe. We took a closer look at the recent performance of four publicly traded module manufacturers: First Solar, Canadian Solar Inc., JinkoSolar Co. and Meyer Burger Technology AG.

Latest Solar Equity Intelligence's quarterly report on First Solar was featured in ?rip?ev today. I believe the price drop in recent months can be attributed to investors shifting focus towards risks from the US elections. While a potential Trump victory could pose challenges for the broader solar sector, I think the market is too confidently pricing in adverse policy changes against the interests of First Solar. Btw, First Solar's stock is up 11% today, mostly driven by yesterday's presidential debate, which increased Harris' odds of winning by 5% relative to Trump. Trump even told in the debate that he's a "big fan of solar". While that statement should be taken with a grain of salt as usual, it's still a small step forward. ??