Here's Why First Solar (FSLR) Fell More Than Broader Market

In the latest trading session, First Solar (FSLR) closed at $204.45, marking a -1.43% move from the previous day. This change lagged the S&P 500's daily loss of 0.38%. Elsewhere, the Dow saw a downswing of 0.51%, while the tech-heavy Nasdaq depreciated by 0.29%.

The stock of largest U.S. solar company has fallen by 15.04% in the past month, lagging the Oils-Energy sector's gain of 5.1% and the S&P 500's gain of 2.08%.

The investment community will be closely monitoring the performance of First Solar in its forthcoming earnings report. The company's upcoming EPS is projected at $4.56, signifying a 7.55% increase compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.32 billion, showing a 17.36% drop compared to the year-ago quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $17.77 per share and a revenue of $5.08 billion, indicating changes of +25.05% and -2.74%, respectively, from the former year.

Investors might also notice recent changes to analyst estimates for First Solar. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.09% increase. First Solar presently features a Zacks Rank of #3 (Hold).

In terms of valuation, First Solar is currently trading at a Forward P/E ratio of 11.68. This valuation marks no noticeable deviation compared to its industry average Forward P/E of 11.68.

It is also worth noting that FSLR currently has a PEG ratio of 0.55. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. Solar stocks are, on average, holding a PEG ratio of 0.64 based on yesterday's closing prices.

The Solar industry is part of the Oils-Energy sector. This industry, currently bearing a Zacks Industry Rank of 231, finds itself in the bottom 7% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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