First Solar (FSLR) Stock Sinks As Market Gains: Here's Why

In the latest close session, First Solar (FSLR) was down 1.67% at $192.31. The stock's performance was behind the S&P 500's daily gain of 0.08%. At the same time, the Dow lost 0.18%, and the tech-heavy Nasdaq gained 0.1%.

Shares of the largest U.S. solar company have appreciated by 0.1% over the course of the past month, underperforming the Oils-Energy sector's gain of 6.52%, and outperforming the S&P 500's loss of 1.74%.

Market participants will be closely following the financial results of First Solar in its upcoming release. The company's upcoming EPS is projected at $2.83, signifying a 45.13% increase compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $1.05 billion, up 23.82% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $17.83 per share and revenue of $5.11 billion, which would represent changes of +25.48% and -2.19%, respectively, from the prior year.

Any recent changes to analyst estimates for First Solar should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 last 30 days, the Zacks Consensus EPS estimate has witnessed a 4.01% decrease. First Solar is currently a Zacks Rank #5 (Strong Sell).

With respect to valuation, First Solar is currently being traded at a Forward P/E ratio of 10.97. This denotes a discount relative to the industry average Forward P/E of 15.78.

It's also important to note that FSLR currently trades at a PEG ratio of 0.35. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. Solar stocks are, on average, holding a PEG ratio of 0.63 based on yesterday's closing prices.

The Solar industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 197, which puts it in the bottom 20% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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