Why First Solar (FSLR) Dipped More Than Broader Market Today

In the latest trading session, First Solar (FSLR) closed at $192.82, marking a -3.42% move from the previous day. The stock trailed the S&P 500, which registered a daily loss of 1.51%. At the same time, the Dow lost 0.97%, and the tech-heavy Nasdaq lost 2.01%.

Coming into today, shares of the largest U.S. solar company had lost 14.42% in the past month. In that same time, the Oils-Energy sector gained 9.4%, while the S&P 500 lost 3.63%.

The upcoming earnings release of First Solar will be of great interest to investors. The company's upcoming EPS is projected at $2.8, signifying a 43.59% increase compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $1.05 billion, indicating a 23.93% growth compared to the corresponding quarter of the prior year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $18.57 per share and revenue of $5.1 billion, indicating changes of +30.68% and -2.33%, respectively, compared to the previous year.

Investors should also take note of any recent adjustments to analyst estimates for First Solar. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 20.05% lower. Currently, First Solar is carrying a Zacks Rank of #5 (Strong Sell).

Valuation is also important, so investors should note that First Solar has a Forward P/E ratio of 10.75 right now. This signifies a discount in comparison to the average Forward P/E of 17.7 for its industry.

It is also worth noting that FSLR currently has a PEG ratio of 0.35. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As the market closed yesterday, the Solar industry was having an average PEG ratio of 0.6.

The Solar industry is part of the Oils-Energy sector. With its current Zacks Industry Rank of 179, this industry ranks in the bottom 27% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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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