30-12-2016, 12:08 PM
Hi all,
I can't find a thread on First Solar so I decided to start one. I think the solar industry is an interesting place to discuss about now and First Solar is one of the company I am interested in.
I do think its hard to find undervalue stock in the market currently. However if you just have to be in the market, this will be a company worth looking into.
The solar industry is currently facing a oversupply of solar panel causing price to drop significantly. More recently, First Solar share price plummeted when they release their earning/guidance call where they expected a restructuring and asset impairment charges of $500 to $700 million, which includes a cash impact of $70 to $100 million due to the acceleration of the series 6 module from the current series 4. They also have their 2016 GAAP EPS guidance revised to a loss of ($4.00) to ($2.00) from $3.75 to $3.90 and a 2017 GAAP EPS guidance of ($0.10) to $0.45. This mean a possibility of losses in the next 2 years.
It is still a question if the series 6 module can be cost competitive by the time it is in production in 2018 or will the price of their competitors solar drop faster.
However, First solar have one of the strongest balance sheet in the industry with large amount of cash and low debt. Currently selling at about 0.6 book value. Therefore I think they will do just fine in the coming years.
Do take a look at the company and comment on what you think.