First solar stock has bounced back 2x more than the S&P since 2017, despite falling sales


First Solar Inc. (NASDAQ: FSLR) The stock price rose more than 2x from about $67 at the end of 2017 to $135 currently, mainly due to favorable changes in the P/S multiple. In addition, the company saw revenue decline during this period and revenue per share has actually fallen, coupled with a marginal increase in the number of shares outstanding. Despite this, the company’s stock price has risen sharply and has outperformed the S&P 500, which rebounded about 50% over the same period.

In our interactive dashboard, Why the first solar stock has moved: FSLR shares are up 101% since 2017we break down the factors behind this movement.

FSLR’s total revenue is down 16% from $2.9 billion in FY 2017 to $2.5 billion today

  • FSLR’s overall revenue growth has been mixed over the years, with sales first falling to $2.2 billion in FY ’18, before rising to $3.1 billion in FY ’19 and hovering around that level until FY. ’21, where sales were $2.9 billion. However, LTM sales are currently lower at $2.5 billion.
  • The company is a leading manufacturer of solar panels and supplier of PV (photovoltaic) power plants.
  • As of FY ’21, module sales make up approximately 80% of the company’s revenue, valued at $2.33 billion, up $1.46 billion in FY ’19, up nearly 60% in only two years.
  • For details on FSLR earnings and peer comparison, see: First solar yield comparison

Revenue per share declined 18% from $28.24 in FY 2017 to $23.10 currently

  • FSLR’s revenue declined from $2.9 billion in FY 2017 to $2.5 billion currently, and the number of outstanding shares increased from 104.2 million in FY 2017 to approximately 107 million currently.
  • As a result, the RPS is down about 18% from $28.24 in FY ’17 to $23.10 currently.

Price-to-Sales (P/S) multiple for FSLR initially fell from 2.4x in 2017 to 1.9x by the end of 2019, but has now returned to 5.9x, almost 2.5x more than 2017 level

  • FSLR’s P/S multiple declined to around 1.9x at the end of 2019, reflecting declining investor expectations about the sustainability of demand for its products.
  • As the tide is turning due to increased adoption of solar products, expectations are up again and the P/S multiple is currently much higher at 5.9x.
  • For more information on the company’s stock returns and comparison with peers, see: First solar stock return comparison.

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