| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 86.00 | -55 |
| Intrinsic value (DCF) | 56.69 | -70 |
| Graham-Dodd Method | 116.60 | -39 |
| Graham Formula | 353.00 | 86 |
First Solar, Inc. (F3A.DE) is a leading global provider of photovoltaic (PV) solar energy solutions, specializing in the design, manufacture, and sale of cadmium telluride (CdTe) thin-film solar modules. Headquartered in Tempe, Arizona, the company serves a diverse clientele, including utilities, independent power producers, commercial and industrial firms, and system developers across the U.S., Japan, France, Canada, India, and Australia. First Solar distinguishes itself with its proprietary CdTe technology, which offers high efficiency, durability, and lower carbon footprint compared to traditional silicon-based panels. As a key player in the renewable energy sector, First Solar benefits from increasing global demand for clean energy solutions, supported by government incentives and corporate sustainability initiatives. The company’s vertically integrated manufacturing process ensures cost efficiency and supply chain resilience, positioning it as a competitive force in the rapidly expanding solar energy market.
First Solar presents a compelling investment opportunity due to its strong market position in the solar energy sector, backed by its proprietary CdTe technology and vertically integrated business model. The company reported robust financials for FY 2023, with revenue of €4.21 billion and net income of €1.29 billion, reflecting solid profitability. Its diluted EPS of €12.02 and strong operating cash flow of €1.22 billion underscore financial health. However, the stock's beta of 1.464 indicates higher volatility compared to the broader market, which may deter risk-averse investors. Additionally, First Solar does not pay dividends, focusing instead on reinvesting profits into growth and R&D. The company’s exposure to regulatory changes and competition from cheaper silicon-based panels are key risks. Overall, First Solar is well-positioned to capitalize on the global energy transition, but investors should weigh its growth potential against sector-specific risks.
First Solar’s competitive advantage lies in its proprietary CdTe thin-film technology, which offers several benefits over conventional silicon-based solar panels, including lower production costs, superior performance in high temperatures, and a smaller environmental footprint. The company’s vertically integrated manufacturing process enhances cost control and supply chain reliability, a critical edge in an industry prone to raw material volatility. First Solar also benefits from strong brand recognition and long-term contracts with utilities and large-scale solar project developers. However, the company faces intense competition from Chinese manufacturers like JinkoSolar and LONGi, which dominate the silicon PV market with lower-cost products. While First Solar’s technology is differentiated, its market share is smaller compared to these giants. Additionally, the company’s focus on utility-scale projects limits its exposure to the fast-growing residential solar segment, where competitors like SunPower excel. Regulatory support in key markets, such as the U.S. Inflation Reduction Act, provides tailwinds, but geopolitical tensions and trade barriers could disrupt supply chains. Overall, First Solar’s technological leadership and operational efficiency position it well, but it must navigate pricing pressures and market fragmentation to maintain growth.