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
Thu, Jul. 7, 3:00 PM
- Citing a slower than expected ramp in bookings, a likely pause in demand ahead of the series 5 ramp, and a potential increase in pricing pressure, driven by aggressive bidding environment from the developers in international segments, analyst Vishal Shah downgrades First Solar (FSLR -10.2%) to Hold from Buy, and slashes the price target to $44 from $80 (current price after today's decline is $44).
- "Even though FSLR remains one of the best run companies in our coverage, we believe it would be difficult for management to grow earnings amidst some of the expected near term headwinds."
- His 2017 estimate for EPS is now $1.50 vs. consensus $3.18, and 2018 of $2.50 vs. $3.98.
Thu, Jul. 7, 3:00 PM
Thu, Jul. 7, 12:45 PM
Fri, Jun. 24, 2:10 PM
- Needham solar analyst Edwin Mok sees significant implications for the industry from the Brexit vote, amplifying bearishness on several names.
- The biggest hit will come for module and inverter makers like First Solar (FSLR -5.3%), along with Chinese makers, including Trina Solar (TSL -4.5%), JinkoSolar (JKS -5.6%), Canadian Solar (CSIQ -10.4%) and JA Solar (JASO -4.1%), he writes. A weaker euro means price impact: "Additionally, if Brexit results in slower demand, it could exacerbate module oversupply just as multiple producers are adding capacity. This in turn could also drive prices lower."
- A notable exception for Mok is SolarEdge (SEDG -4.5%), for which he maintains a Buy. Still: "The vast majority of [SEDG] sales are priced in the euro. With limited cost infrastructure in Europe as a natural hedge, weakness in the euro would have a direct impact to SEDG’s bottom line."
- And U.S. firms like SolarCity (SCTY -2.4%), Sunrun (RUN -7.4%) and Vivint (VSLR -4.7%) could benefit with zero international exposure and possibly lower costs of capital.
Wed, Apr. 27, 5:01 PM
- First Solar (NASDAQ:FSLR) blames its Q1 sales miss on "the timing of systems revenue recognition across multiple projects, partially offset by higher revenue from the Desert Stateline project." The Desert Stateline project agreement was amended to include an additional 15% interest in the project, which boosted Q1 EPS but won't impact full-year EPS.
- In addition to slightly improving EPS guidance, First Solar is upping its 2016 gross margin guidance to 18%-19% from 17%-18%, and its op. cash flow guidance to $500M-$700M from $400M-$600M. Capex guidance remains at $300M-$400M, shipment guidance at 2.9GW-3GW, and year-end net cash balance guidance at $1.9B-$2B.
- Metrics: As of today, YTD bookings total 600MW ($300M). Expected future modules shipments + third-party module sales are down by 200MW YTD to 4GW, and expected future systems + third-party module revenue is down by $500M to $6.4B. Potential booking opportunities (mostly early-stage) have risen to 23.3GW from 20.3GW at the time of the Q4 report.
Module production rose 2% Q/Q and 43% Y/y to 774MW. Capacity utilization was 100%, flat Q/Q and up from 87% a year ago. Fleet-average conversion efficiency rose 10 bps Q/Q and 150 bps Y/Y to 16.2%; lead-line efficiency was 16.4%.
- Financials: Gross margin (boosted by the Desert Stateline adjustment) rose to 31% from 24.65 in Q4 and 10.3% a year ago. SG&A spend was roughly flat Y/Y at $67.5M, and R&D spend down 13% to $30.2M. Free cash flow was $12.5M. First Solar ended Q1 with $1.89B in cash and $299M in long-term debt.
- First Solar is down 6.4% after hours to $58.06. SunPower (NASDAQ:SPWR), which reports on the afternoon of May 5, is down 1.3% to $21.80.
- First Solar's results/guidance, earnings release, slides (.pdf)
- Update: First Solar has also announced CFO James Widmar will be replacing James Hughes as CEO on July 1.
Wed, Apr. 27, 4:10 PM
- First Solar (NASDAQ:FSLR): Q1 EPS of $1.66 beats by $0.73.
- Revenue of $848.5M (+80.8% Y/Y) misses by $118.13M.
- Now expects 2016 EPS of $4.10-$4.50 vs. prior guidance of $4.00-$4.50. Consensus is at $4.30.
- Still expects 2016 revenue of $3.8B-$4B. Consensus is at $3.96B.
- Shares -9.3% after hours.
- Press Release
Wed, Mar. 23, 3:05 PM
- Like many other energy names, solar stocks are underperforming (TAN -3.8%) on a day oil prices are giving back some of their recent gains. WTI crude is down 4.3% to $39.69/barrel, and Brent crude down 3.2% to $40.45/barrel. The S&P is down 0.6%, and the Nasdaq down 1%.
- SunEdison (down 12.1%) is among the casualties, as liquidity/solvency fears continue surrounding the beaten-up solar/wind project developer. SunEdison yieldcos TerraForm Power (TERP -3.3%) and TerraForm Global (GLBL -4.7%) are also off.
- SolarCity (SCTY -9.6%), which yesterday afternoon announced the closing of a $131M tax equity solar project fund, is also off sharply. Other notable decliners include SunPower (SPWR -7.4%), First Solar (FSLR -4%), Canadian Solar (CSIQ -4.2%), Sunrun (RUN -4.3%), Enphase (ENPH -6.5%), Daqo (DQ -5%), JinkoSolar (JKS -5.9%), Sky Solar (SKYS -11.1%), and former SunEdison acquisition target Vivint Solar (VSLR -11.3%).
Tue, Mar. 1, 10:38 AM
- "[First Solar] is probably the highest-quality stock in the solar space, so it pains us to step aside at this time and in this manner, but the risk-reward trade-off seems balanced here," writes JPMorgan's Paul Coster, downgrading to Neutral. His target remains $69.
- Coster's earnings estimates are unchanged. He still praises First Solar's (FSLR -3.4%) balance sheet and thin-film module offerings, and declares fundamentals remain solid for the 2016-2018 timeframe. The downgrade comes less than a week after First Solar soared in response to a Q4 beat highlighted by strong module production growth.
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. 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.
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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