First Solar Analyst Day: Conservative Growth Plans In Spite Of Exceptional Roadmap
EnerTuition • 23 Comments
EnerTuition • 23 Comments
First Solar Sets Far Too Conservative Guidance
EnerTuition • 29 Comments
EnerTuition • 29 Comments
First Solar Proves Solar Skeptics Wrong Again
Wed, Feb. 24, 1:50 PM
- SolarCity (SCTY +5%), SunPower (SPWR +7%), and Canadian Solar (CSIQ +4.5%) are doing well after First Solar (FSLR +12.9%) beat Q4 estimates (strongly on EPS), slightly lowered its 2016 sales guidance, and reiterated its 2016 EPS guidance.
- The numbers come a week after Canadian soared thanks to a Q4 guidance hike, and two weeks after SolarCity plunged due to a Q4 installation guidance miss and soft Q1 outlook. SunPower fell moderately last Friday after issuing light guidance to go with a Q4 beat.
- Baird's Ben Kallo (Outperform, target hiked by $5 to $74) considers First Solar well-positioned to continue growing margins via efficiency gains and cost reductions. He also notes ~4.5GW of First Solar's ~20.3GW potential bookings pipeline involves mid-to-late stage opportunities, which gives him confidence in the company's ability to fill its order book through 2017.
- Other analysts downplay the sales guidance cut, attributing it to the shifting of projects to 2017 thanks to the ITC tax credit extension. Meanwhile, Oppenheimer's Colin Rusch (Outperform rating, $76 target) sees First Solar "regaining the mantle of solar's cost leader."
- First Solar's results/guidance, Q4 details
Tue, Feb. 23, 4:54 PM
- After coming off a halt, First Solar (NASDAQ:FSLR) is up 3% after hours to $63.66 in the wake of its Q4 beat, 2016 sales guidance cut, and 2016 EPS guidance reiteration.
- Helping EPS guidance stay intact: First Solar has revised its 2016 gross margin guidance to 17%-18% from 16%-18%. Op. cash flow guidance has been cut by $100M to $400M-$600M, and year-end net cash balance guidance by $100M to $1.9B-$2.2B. Capex and shipment guidance is unchanged at $300M-$400M and 2.9GW-3GW, respectively.
- Metrics: 2015 bookings totaled 3.4GW, and shipments 2.9GW. Expected system + 3rd-party module shipments are currently at 4.4GW, down from 4.8GW at the time of the Q3 report but up from 3.7GW at the end of 2014. Expected system + 3rd-party module revenue is at $7B, down from $7.4B at the time of the Q3 report and $7.3B at the end of 2014. Potential booking opportunities (mostly early-stage) have risen to 20.3GW from 17.9GW at the time of the Q3 report.
Module production rose 50% Y/Y in Q4 to 761MW, and 36% over the whole of 2015 to 2.52GW. Notably, Q4 capacity utilization was at 100%, up from 94% in Q3 and 84% a year ago. Average conversion efficiency rose 30 bps Q/Q and 170 bps Y/Y to 16.1%.
- Financials: Gross margin (affected by project sale timings) fell to 24.6% from 38.1% in Q3 and 30.8% a year ago. R&D spend rose 5% Y/Y to $37M; SG&A spend fell by 11% to $63M. 2015 op. cash flow was -$875M, and free cash flow -$838M. First Solar ended 2015 with $1.83B in cash and $289M in long-term debt.
- First Solar's Q4 results, earnings release, slides (.pdf)
Tue, Feb. 23, 4:10 PM
- First Solar (NASDAQ:FSLR): Q4 EPS of $1.60 beats by $0.82.
- Revenue of $942.3M (-6.7% Y/Y) beats by $13.29M.
- 2016 revenue guidance range revised to $3.8B-$4B from $3.9B-$4.1B. Consensus is at $3.83B.
- 2016 EPS guidance unchanged at $4.00-$4.50. Consensus is at $4.12.
- Shares are halted.
- Press Release
- Update (5:07PM ET): First Solar is up 3.4% after hours after coming off a halt. More details on the Q4 report can be found here.
Mon, Feb. 22, 5:35 PM
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Tue, Feb. 9, 5:00 PM
- SolarCity (down 28.1%) reported Q4 solar installations of 272MW, up 54% Y/Y but below guidance of 280MW-300MW. Moreover, the company has guided for Q1 installations of 180MW (+18% Y/Y).
- Top rival Sunrun (NASDAQ:RUN) is down 7.6% after hours. First Solar (NASDAQ:FSLR) is down 2.4%. Both companies are expected to deliver their Q4 reports in the coming weeks.
Thu, Jan. 7, 2:32 PM
- Solar stocks are among the biggest casualties as the Nasdaq drops 2.8% and markets generally go into risk-off mode. After soaring last month in response to U.S. renewable tax credit extensions, the Guggenheim Solar ETF (NYSEARCA:TAN) is now just slightly over $2 above a 52-week low of $25.25.
- SunEdison (down 33%) is the biggest decliner in the group, after having announced a set of dilutive debt offerings and exchange transactions. Canadian Solar (CSIQ -14.4%), JinkoSolar (JKS -14.6%), Solar3D (SLTD -11.2%), Sky Solar (SKYS -16.6%), and RGS Energy (RGSE -10.4%) are also seeing double-digit losses.
- Other major decliners: SolarCity (SCTY -6.8%), First Solar (FSLR -5.5%), SunPower (SPWR -9.9%), Enphase (ENPH -6%), SolarEdge (SEDG -5.3%), TerraForm Power (TERP -8.2%), TerraForm Global (GLBL -5.7%), and JA Solar (JASO -5.3%).
Tue, Jan. 5, 9:28 AM
- Goldman's Brian Lee has upgraded two solar plays with heavy U.S. exposure - First Solar (NASDAQ:FSLR) and SolarEdge (NASDAQ:SEDG) - to Buy. And he has downgraded two others - SunPower (NASDAQ:SPWR) and Sunrun (NASDAQ:RUN) - to Neutral.
- Lee expects First Solar ($100 target) to be "a key beneficiary of CA's decision to raise its renewable mandate to 50 percent," as well as of the U.S. ITC extensions that led First Solar and many peers to recently soar. He also touts First Solar's growing international pipeline, and argues its strong balance sheet positions it well to "navigate more selective financing markets and maintain a relatively low cost of capital – while at the same time providing financial flexibility to fund projects off its balance sheet or be opportunistic via M&A to add to pipeline/backlog."
- SolarEdge ($41 target) is deemed "the optimal way to leverage the rooftop solar investment theme given its strong balance sheet and cash flow generation." Lee notes the company gets ~75% of its sales from the U.S. residential market, and thinks energy storage (fueled by a Tesla partnership) could provide 10%-15% EPS upside by 2017, thus making SolarEdge "an early play on the emerging grid batteries investment theme." Meanwhile, fears of ASP pressure (a long-time concern) are considered overdone.
- Lee on SunPower ($35 target): "Following a November 2015 analyst day that focused more on technology differentiation than financial metrics, we see limited catalysts to drive SPWR shares higher compared to other names in our coverage. Further, we await improved disclosures, particularly on the non-GAAP side and visibility into announced p-type module volume expansion in 2016-2017, to become more constructive again." Nonetheless, Lee still likes SunPower's diverse end-market exposure, as well as its healthy balance sheet and ongoing module efficiency gains.
- FSLR +5.3% premarket to $70.23. SEDG +6.1% to $29.70. SPWR -0.2% to $30.29. RUN -2.5% to $10.93.
Tue, Jan. 5, 9:15 AM
Dec. 21, 2015, 11:11 AM
- The Guggenheim Solar ETF (TAN +2.1%) is now up 11% since Congress agreed six days ago to a budget compromise (officially passed on Friday) that involved extending the solar investment tax credit (ITC) and wind production tax credit (PTC). Today's gains come with the Nasdaq up 0.6%.
- U.S. solar stocks naturally continue headlining the list of gainers. The list includes SunPower (SPWR +3.4%), First Solar (FSLR +3.3%), Sunrun (RUN +6.9%), Enphase (ENPH +8%), 8point3 Energy (CAFD +4.1%), RGS Energy (RGSE +19.6%), and Solar3D (SLTD +4.5%).
- Other winners include JinkoSolar (JKS +4.7%), ReneSola (SOL +8%), Yingli (YGE +3.5%), China Sunergy (CSUN +4.2%), TerraForm Global (GLBL +3.2%), and SolarEdge (SEDG +3.2%), the last of which depends heavily on the U.S. residential market.
- Citing (what else?) the tax credit extensions, Morgan Stanley's Stephen Byrd has respectively hiked his SolarCity (SCTY -0.3%), First Solar, SunPower, and Sunrun targets by $18, $2, $2, and $5 to $104, $70, $43, and $28. Bernstein and KeyBanc respectively upgraded SolarCity and Sunrun last Thursday.
Dec. 16, 2015, 9:52 AM
- Solar stocks are flying higher (TAN +6.4%) after House Republicans unveiled (as part of a compromise with Democrats that involved lifting a U.S. oil export ban) that would keep the solar investment tax credit (ITC, has been set to expire at the end of 2016) at 30% through 2019, before being phased down through 2022.
- In addition, the wind production tax credit (PTC) would be extended through 2020, albeit with a phase-down from a current level of 2.3 cents per kWh that would start in 2017.
- U.S. solar firms are naturally among the biggest gainers: The group includes SolarCity (SCTY +24.6%), SunEdison (SUNE +17%), First Solar (FSLR +8.5%), SunPower (SPWR +14.3%), Sunrun (RUN +23.1%), TerraForm Power (TERP +8.3%), 8point3 Energy (CAFD +5.6%), Solar3D (SLTD +4.6%), and RGS Energy (RGSE +6.9%). SunEdison/TerraForm also have healthy wind exposure. Enphase (ENPH +29.1%) is soaring on the news and a Roth upgrade to Buy.
- Israel's SolarEdge (SEDG +14.4%), which has strong exposure to U.S. installers, is also surging. Other winners include Canadian Solar (CSIQ +8.4%), Trina (TSL +4.9%), JinkoSolar (JKS +7.3%), JA Solar (JASO +3.1%), China Sunergy (CSUN +3.8%), and TerraForm Global (GLBL +5.6%). JA Solar has also been upgraded to Buy by Roth.
Dec. 16, 2015, 9:14 AM
Dec. 14, 2015, 1:41 PM
- Solar stocks are posting big gains (TAN +4.8%) on a quiet day for equities after representatives of 195 countries (including the U.S. and major developing nations such as China and India) reached a deal in Paris to curb greenhouse gas emissions. Coal stocks are going in the opposite direction.
- Also: 1) Oil prices are bouncing after trading near multi-year lows earlier today. WTI crude is up 2.2% to $36.40/barrel. 2) Trina Solar (up 11.4%) has received a preliminary going-private offer at a 21.5% premium to Friday's close.
- U.S. firms SolarCity (SCTY +8.4%), Sunrun (RUN +13.4%), TerraForm Power (TERP +8%), and RGS Energy (RGSE +25%) are among the standouts. Other U.S. gainers include First Solar (FSLR +4.6%), SunPower (SPWR +6.5%) and Vivint (VSLR +2.8%). First Solar tumbled last week in response to its 2016 guidance; SunPower was hit by a $400M convertible offering.
- Among non-U.S. names, gainers include Canadian Solar (CSIQ +4.4%), Yingli (YGE +2.9%), ReneSola (SOL +3.8%), and China Sunergy (CSUN +3.9%). SolarEdge (SEDG +4.6%), based in Israel but with strong U.S. exposure, is also doing well.
- Update: Also possibly helping the group: Congressional Democrats are reportedly open to a deal to lift an oil-export ban in exchange for extending solar and wind tax credits.
Dec. 10, 2015, 9:14 AM
Dec. 9, 2015, 5:40 PM
Dec. 9, 2015, 4:37 PM
- First Solar (NASDAQ:FSLR) expects 2016 revenue of $3.9B-$4.1B and EPS of $4.00-$4.50 vs. a consensus of $4.09B and $3.98. For reference, 2015 guidance is for revenue of $3.5B-$3.6B and EPS of $4.30-$4.50.
- Gross margin is expected to drop to 16%-18% from 2015's 24%-25%. Op. cash flow is expected to total $500M-$700M, with capex rising to $300M-$400M from 2015's $175M-$200M. Module shipments are expected to rise slightly to 2.9GW-3GW from 2.8GW-2.9GW.
- First Solar expects to end 2016 with a net cash balance of $2B-$2.3B, up from $1.3B-$1.4B at the end of 2015. The guidance assumes a $200M gain "the expected sale of an equity investment method and share of [YieldCo] 8point3's earnings," and doesn't account for "approximately $450 million from the expected sale of an equity method investment treated as an investing cash flow."
- Shares have fallen to $54.50 after hours. Conference call is underway (webcast).
Nov. 10, 2015, 11:14 AM
- SunEdison (SUNE -18.9%) has plunged to new multi-year lows after posting mixed Q3 results, cutting its full-year cash available for distribution (CAFD) guidance, and narrowing its full-year project delivery guidance. Canadian Solar (CSIQ -6.5%) has gone south in spite of beating estimates and providing above-consensus Q4 guidance.
- Solar peers are also off - the Guggenheim Solar ETF (NYSEARCA:TAN) is at its lowest levels since early October. U.S. decliners include First Solar (FSLR -6.2%), SolarCity (SCTY -6%), SunPower (SPWR -6.3%), Enphase (ENPH -8.1%), Solar3D (SLTD -4.6%), SunEdison's TerraForm Power (TERP -13.2%) YieldCo, and SunEdison acquisition target Vivint (VSLR -3.9%).
- International decliners include Chinese plays Trina (TSL -5.7%), ReneSola (SOL -7.1%), JinkoSolar (JKS -9.2%), and JA Solar (JASO -5.3%), as well as Israel's SolarEdge (SEDG -6.7%) and SunEdison's emerging markets-focused TerraForm Global (TERP -13.2%) YieldCo.
- “Right now I want the company to become more boring, Boring, and cash-flow generating," said embattled SunEdison CEO Ahmad Chatila on the Q3 earnings call. He reiterated SunEdison expects to build 3.3GW-3.7GW of projects in 2016; the company had once planned to build 4.5GW.
First Solar, Inc. operates as a solar energy solutions company. It engages in the designing, manufacturing, marketing and distribution of photovoltaic solar power systems and solar modules with an advanced thin-film semiconductor technology. The company operates in two business segments:... More
Industry: Semiconductor - Specialized
Country: United States
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