First Solar Shares Rise 0.88% on Earnings Optimism Outperforming Sector as $560M Volume Ranks 253rd in U.S. Market

Market Snapshot

On October 29, 2025, First Solar (FSLR) closed with a 0.88% price increase, reflecting modest gains amid a broader market focus on renewable energy stocks. The stock’s trading volume of $560 million ranked it 253rd in the U.S. equity market for the day, indicating moderate liquidity. Over the past month, FSLR shares have risen 7.2%, outperforming the 3.1% average gain in the renewable energy sector. The stock currently trades at $239.59, with an average analyst price target of $243.70, suggesting a cautiously optimistic outlook ahead of its upcoming earnings report on October 30.

Key Drivers

Earnings Expectations and Historical Performance

First Solar is poised to report third-quarter 2025 results after market close on October 30, with analysts projecting earnings per share (EPS) of $4.22 and revenue of $1.59 billion. This represents a 48.1% year-over-year increase in EPS and 79.4% revenue growth, driven by a combination of strong demand for solar energy and strategic production tax credits. The company’s recent performance, including a 18.7% earnings surprise in the prior quarter, has bolstered confidence in its ability to exceed estimates. Analysts have reconfirmed their revenue forecasts over the past 30 days, with First Solar’s full-year guidance already surpassing Wall Street expectations.

Section 45X Tax Credits and Cost Dynamics

A critical factor underpinning First Solar’s profitability is the Section 45X advanced manufacturing production tax credit, which provides incentives for U.S.-made solar components. The company anticipates recognizing $390–$425 million in these credits during Q3 2025, directly reducing production costs and enhancing cash flow. However, this benefit is partially offset by rising tariff-related expenses on imported goods and raw materials, which have increased the cost of goods sold. Additionally, a shift in sales mix—with more modules directed to lower-priced international markets like India—has dampened margins. High production costs at domestic U.S. facilities and underutilized factories in Malaysia and Vietnam further weigh on the bottom line, highlighting the delicate balance between tax incentives and operational challenges.

Sector Momentum and Peer Performance

The broader renewable energy sector has gained traction, with peer companies such as Bloom Energy and Nextracker reporting robust Q3 results. Bloom Energy achieved 57.1% year-over-year revenue growth, while Nextracker’s 42.4% revenue increase outpaced expectations, resulting in an 8.8% stock price surge. These successes have reinforced investor confidence in the sector’s long-term potential, with First Solar benefiting from a tailwind of positive sentiment. Analysts note that the renewable energy segment has seen a 3.1% average share price increase over the past month, positioning First Solar as a key player in a high-growth industry.

Institutional Confidence and Market Positioning

First Solar’s institutional ownership and recent trading activity underscore its strategic importance. Stratos Wealth Partners and other institutional investors have increased their stakes in the company, with holdings rising by multiples in the second quarter of 2025. The stock’s beta of 1.38 and P/E ratio of 20.65 reflect its high-growth profile, supported by a PEG ratio of 0.46, which suggests undervaluation relative to earnings growth. Analysts have assigned a “Moderate Buy” consensus rating, with 26 “Buy” ratings and four “Hold” ratings, indicating a strong but not unanimous endorsement of its future prospects.

Earnings Season Context and Strategic Outlook

First Solar’s earnings report comes amid a broader market focus on renewable energy and AI-driven sectors. While the company has missed revenue estimates four times in the past two years, its recent performance—exceeding revenue expectations by 4.9% in the prior quarter—has rekindled optimism. The anticipated 7.2% monthly gain in FSLR shares aligns with a sector-wide rally, as investors bet on long-term decarbonization trends. However, near-term challenges, including tariff pressures and production costs, will test the company’s ability to maintain its growth trajectory.

Analyst Sentiment and Forward Guidance

Analysts have emphasized the importance of First Solar’s full-year revenue guidance, which already exceeds expectations. The company’s Earnings Surprise Prediction (ESP) of +1.59% and Zacks Rank #3 (Hold) suggest a higher probability of beating estimates. While some analysts caution about near-term margin pressures, others highlight the stock’s potential to benefit from the global shift toward clean energy. With a Zacks Consensus Estimate of $4.31 per share for Q3, the market is pricing in a 45% year-over-year earnings increase, reflecting a blend of historical performance and forward-looking optimism.