First Solar’s Resilience in Turbulent Times: A Stock Surge Amid Tariffs and Expansion
48min read The stock of first solar (NASDAQ: FSLR) surged 10.7% in April 2025, defying near-term headwinds to signal investor confidence in its long-term solar dominance. At the heart of this momentum lies a strategic pivot: leveraging U.S. manufacturing prowess and a resilient backlog to navigate trade barriers and capitalize on federal incentives.
Financial Adjustments Highlight Resilience
First Solar’s first-quarter results revealed mixed short-term performance but underscored its ability to pivot. Net sales fell to $0.8 billion, with EPS dropping to $1.95—down from $3.65 in the prior quarter. However, the company’s revised 2025 guidance, while conservative, paints a strategic picture.
- Net Sales: Reduced to $4.5B–$5.5B, reflecting tariffs on imported solar components.
- Gross Margin: Trimmed to $1.96B–$2.47B, but the 44.2% gross margin rate remains robust.
The real story lies in the backlog: 66.3GW of contracted demand, a testament to First Solar’s dominance in the U.S. solar market. CEO Mark Widmar emphasized this during the April 29 earnings call: “Our backlog is a clear indicator of the trust customers place in our domestic supply chain and technology.”
Ask Aime: First Solar (FSLR) stock rose sharply. What's driving this surge?
Domestic Manufacturing as a Shield Against Tariffs
First Solar’s vertically integrated U.S. supply chain—bolstered by its Louisiana facility—positions it uniquely amid rising trade tensions. While new tariffs on imported solar components pressured near-term margins, the company’s reliance on domestic production insulates it from disruptions.
The Inflation Reduction Act (IRA) further fuels its advantage. Analysts estimate $1.65B–$1.7B in 2025 tax credits for First Solar, offsetting costs from tariffs. Susquehanna analysts noted, “First Solar’s CdTe technology and U.S.-centric footprint make it the IRA’s biggest beneficiary.”
Analyst Optimism Amid Near-Term Pain
Despite lowered guidance, analysts remain bullish, citing a low P/E ratio of 10.19—a bargain compared to peers. Piper Sandler’s $205 price target and UBS’s retained “Buy” rating reflect this sentiment.
- Balance Sheet Strength: A current ratio of 2.5 and low debt-to-equity ratio (0.08) provide liquidity buffers.
- Valuation Edge: The stock’s P/E ratio is nearly half that of rival SunPower (SPWR), despite First Solar’s larger scale.
The Risks and the Reward
The path isn’t without hurdles. First Solar faces $95M–$220M in underutilization costs due to tariff-driven delays. Yet, its backlog and IRA tailwinds suggest these are temporary.
Baird analyst Ted O’Neill summed it up: “First Solar’s backlog is a moat. Even with short-term pain, its long-term growth trajectory is unmatched in the sector.”
Conclusion: A Solar Giant’s Play for Dominance
First Solar’s April surge isn’t just a stock blip—it’s a reflection of strategic bets paying off. With a 66.3GW backlog, IRA-fueled tax credits, and a P/E ratio signaling undervaluation, the company is poised to capitalize on the U.S. solar boom.
Investors should note: FSLR’s stock could climb further if its Louisiana facility ramps up production as planned. The company’s Q2 2025 earnings will test execution, but the data points to a compelling story. As Widmar stated, “We’re not just surviving tariffs—we’re using them to solidify our lead.”
In a sector rife with volatility, First Solar’s blend of domestic scale, technology, and IRA tailwinds makes it a rare buy signal in renewable energy’s next chapter.
