NASDAQ:FSLR) might not be the most widely known stock at the moment, it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on First Solar’s outlook and valuation to see if the opportunity still exists.” data-reactid=”28″>While First Solar, Inc. (NASDAQ:FSLR) might not be the most widely known stock at the moment, it led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on First Solar’s outlook and valuation to see if the opportunity still exists.
View our latest analysis for First Solar ” data-reactid=”29″>View our latest analysis for First Solar
What is First Solar worth?
First Solar is currently expensive based on my price multiple model, where I look at the company’s price-to-earnings ratio in comparison to the industry average. I’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 77.92x is currently well-above the industry average of 36.5x, meaning that it is trading at a more expensive price relative to its peers. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since First Solar’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from First Solar?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. First Solar’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
we’ve identified 2 warning signs with First Solar, and understanding them should be part of your investment process.” data-reactid=”53″>In light of this, if you’d like to do more analysis on the company, it’s vital to be informed of the risks involved. In terms of investment risks, we’ve identified 2 warning signs with First Solar, and understanding them should be part of your investment process.
50 other stocks with a high growth potential.” data-reactid=”54″>If you are no longer interested in First Solar, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”59″>This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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