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We previously covered First Solar, Inc. (NASDAQ:FSLR) in January 2024, discussing how its utility-scale solar panels remained in hot demand, with its growing backlog extended through 2030 at favorable ASPs.
Combined with the bottomed solar investment thesis and the normalizing macroeconomic outlook, we maintained our Buy rating for the stock then.
In this article, we shall discuss why we are maintaining our optimistic view surrounding FSLRs cadmium telluride investment thesis, despite the intensified pricing competition from Chinese-produced silicon-based solar panels and the formers decelerating backlog growth.
With the stock already charting an impressive +13.5% price return since our previous article, we believe that the stock remains well positioned to more than double from current levels, with the management prudently sizing their investments and capacity expansions.
Interested investors may add at any dips.
The FSLR Investment Thesis Remains Robust
For now, FSLR has reported a bottom-line beat in the FQ423 earnings call on February 27, 2024, with net sales of $1.15B (+43.7% QoQ/ +15.6% YoY) and EPS of $3.25 (+30% QoQ/ +4742.8% YoY), and FY2023 numbers of $3.31B (+26.7% YoY) and $7.74 (+1987.8% YoY), respectively.
The growing bottom line is naturally attributed to the solar companys ability to deliver on its historic backlog of 80.1 GWs and a global opportunity pipeline of 66.5 GWs as of FQ423, thanks to the drastic expansion in its nameplate capacity to 16.6 GWs by the end of the year (+69.3% YoY) at favorable ASPs.
As a result, it is unsurprising that the management has offered an excellent FY2024 revenue guidance of $4.5B (+35.9% YoY) and EPS guidance of $13.50 (+74.4% YoY) at the midpoint, with sales volumes of 15.95 GWs (+39.9% YoY).
Most importantly, the management has been able to deliver these numbers with a relatively healthy balance sheet at a net cash situation of $1.63B (+20.7% QoQ/ -31.7% YoY) by FQ423, despite the intensified FY2023 capex of $1.38B (+53.4% YoY). |
