In short: First Solar (ticker: FSLR) is seen as a promising player in utility-scale renewable energy thanks to its expanding U.S.-focused manufacturing, sizable backlog, and favorable policy tailwinds—but cautious analysts warn of order cancellations and margin pressure that may temper upside near-term.
Market Snapshot & Recent Moves
First Solar’s stock recently dropped around 6.7% on February 6, 2026, closing at about $218.73, underperforming broader indices despite heightened trading activity. This followed declines over the prior two days, a sign of investor caution despite earlier resilience.
Long-Term Growth Catalysts
Ramp-Up in Manufacturing & Order Backlog
First Solar is accelerating its production capacity to meet surging global demand for solar modules: Q2 2025 output reached 4.2 GW, with plans to exceed 25 GW annually by the end of 2026. This expansion is backed by a strong pipeline—nearly 61.9 GW of contracted module sales through 2030, equating to approximately $18.5 billion in potential revenue.
U.S.-Centric Investment Strategy
To mitigate tariff risks and capitalize on policy incentives, First Solar has invested heavily in domestic infrastructure—about $4.5 billion since 2019 across production and R&D in several states. The company projects growing employment: over 5,500 direct U.S. jobs by 2026 and more than 30,000 jobs supported across the economy by 2027.
Critical Cautions to Consider
Order De-bookings & Margin Pressure
Jefferies downgraded FSLR from Buy to Hold, trimming their target to $260 from $269, warning that expectations may exceed reality. A key concern was the cancellation of 6.6 GW of future orders, lowering confidence in backlog reliability.
Shifting Guidance & Tariff Headwinds
First Solar revised down its guidance in early 2025 due to tariffs, lowering sales forecasts and analyst expectations. Although later recovered, this episode underscores sensitivity to external trade and regulatory disruptions.
Analyst Sentiment: Consensus & Variability
Moderate to Strong Buy Consensus
- TipRanks reports an average 12-month target of ~$275, implying a ~15% upside. Ratings balance between Buy, Hold, and few Sell.
- StockAnalysis.com finds a “Strong Buy” consensus from 24 analysts, with an average target around $252 (roughly +12% upside).
- MarketBeat shows a consensus target of $275.94, or ~22% upside, with a “Moderate Buy” stance.
Growth Metrics Supportive
Simply Wall St projects First Solar’s earnings and revenue growing at ~19% and ~9% per year, respectively, with a forecasted return on equity of ~21% in three years.
Valuation Insights
Some drivers appear mispriced:
- Seeking Alpha notes FSLR is down nearly 46% from its mid-2024 peak, trading at a forward P/E of about 13x—below the industry average.
- TIKR’s valuation model estimates a fair value of $310 within two years, based on projected EPS growth from ~$12 to ~$31 and a 10x forward P/E. That implies nearly 146% upside over two years, or annualized return close to 57%.
Expert Insight
“The company expects to spend a significant amount on expanding manufacturing capacity and upgrading equipment to meet rising demand… backed by a robust sales backlog, First Solar is well-positioned to benefit from global renewable energy momentum.”
Strategic Outlook
On the positive side, First Solar’s domestic build-out, ambitious capacity target, and backlog create long-term tailwinds. Wall Street sees moderate upside with targets clustered in the mid-$200s, and growth estimates remain strong.
On the cautious side, debookings and guidance volatility hint at execution risks, and analysts such as Jefferies flag the possibility of a plateau.
A balanced approach could involve monitoring order flow stability, margin trends, and U.S. policy developments while recognizing the company’s strategic strengths.
Conclusion
First Solar presents a compelling growth narrative in utility-scale solar with expanding U.S. capacity, a substantial order pipeline, and solid earnings projections. Analyst consensus tilts toward moderate buying opportunities, backed by optimistic medium- to long-term valuations—but with clear risks in debookings and margin pressures. For investors, the stock may offer upside if execution and policy stay favorable.
FAQs
What is the short-term target for FSLR stock?
Analysts cite targets ranging from the mid-$250 to mid-$275 range, suggesting potential gains of roughly 10–22% based on the current price.
Why were order cancellations highlighted as a concern?
First Solar reported 6.6 GW in debookings—former orders canceled by affiliates of BP—undermining confidence in future revenue visibility.
How aggressive is First Solar’s manufacturing expansion?
The company plans to boost its capacity to over 25 GW annually by the end of 2026, backed by billions of dollars in U.S. investments.
Is First Solar undervalued compared to peers?
Yes, its forward P/E of around 13x is below the industry average, and some valuation models point to significant upside if projected EPS growth materializes.
What macro trends could support FSLR’s future growth?
Federal incentives, tariffs on imports, and the shift toward domestic manufacturing favor First Solar, especially under clean energy transitions and utility-scale demand.