First Solar's Year Long Run: The Google of Cleantech?

This seems overdone in anything other than the most superficial way, but the year-long run at First Solar (FSLR) has some calling the cleantech company the Google (GOOG) of solar.

First Solar had an initial public offering in the middle of November 2006. The stock went out at $20 a share, so effectively, it has gone up in value by 11 times in a little less than a year. Google went out at $85 a few years ago and is now above $700. The numbers are bigger, but the multiple isn't.

First Solar's stock is being driven by rapid growth in revenue and profit. In the third quarter, revenue came to $159 million, more than triple the $40.8 million for the same period the year before. Revenue for the second quarter came to $77.2 million, so revenue essentially doubled in three months.

This is all true, as far as it goes, but it's worth pointing out that First Solar is selling cadmium telluride cells, which, while cheap, aren't exactly technology leaders. As more appropriate solar silicon production comes on-line over the next 12 months, it will be important to watch closely for the impact on cadmium telluride solar vendors.

Then again, despite its many critics, the solar market is exploding. There is ample room for vendors of all stripes, if they can sell in volume.

Comments

[Mark Anthony:]

I must point out that the CdTe material FSLR uses is NOT cheap at all, from an earth resource point of view. Cadmium is extremely toxic and an extremely high cost to environment. Tellurium is more rare than platinum on earth. The extremely limited global supply of tellurium really put a tight cap on FSLR's growth potential.

The whole world produces about 215 tons of tellurium per year, even less than platinum. FSLR needs 135 tons per GW of production. Due to other usages, tellurium price already boomed from $4 to over $100, implying a severe shortage. How FSLR is going to find tellurium source to feed its new factories being built in Malaysia? This company has no growth potential whatsoever.

See a related article:
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Read more on my blog:
stockology.blogspot.co...

It's a shame that a rare and precius material like tellurium should be wasted on trivial things like generate a few watts of solar electricity.

2007 Nov 13 02:35 AM

[JoJo:]

Very interesting - thank you!

2007 Nov 14 04:19 AM