First Solar Inc's Diminishing Glow: A Deep Dive into Its GF Score

Long-established in the Semiconductors industry, First Solar Inc (NASDAQ:FSLR) has enjoyed a stellar reputation. However, it has recently witnessed a decline of 2.72%, juxtaposed with a three-month change of -12.95%. Fresh insights from the GuruFocus Score Rating hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of First Solar Inc.

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• FSLR 30-Year Financial Data

• The intrinsic value of FSLR

First Solar Inc's Diminishing Glow: A Deep Dive into Its GF Score

Decoding the GF Score

The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.

• 1. Financial strength rank: 9/10

• 2. Profitability rank: 6/10

• 3. Growth rank: 4/10

• 4. GF Value rank: 1/10

• 5. Momentum rank: 6/10

Based on the above method, GuruFocus assigned First Solar Inc the GF Score of 67 out of 100, which signals poor future outperformance potential.

Understanding First Solar Inc's Business

First Solar Inc, with a market cap of $18.91 billion, designs and manufactures solar photovoltaic panels, modules, and systems for use in utility-scale development projects. The company's solar modules use cadmium telluride to convert sunlight into electricity, a process commonly referred to as thin-film technology. As the world's largest thin-film solar module manufacturer, First Solar has production lines in Vietnam, Malaysia, the United States, and India. Despite its impressive sales of $2.99 billion and an operating margin of 3.39%, the company's recent performance raises concerns.

First Solar Inc's Diminishing Glow: A Deep Dive into Its GF Score

First Solar Inc's Growth Prospects

A lack of significant growth is another area where First Solar Inc seems to falter, as evidenced by the company's low Growth rank. The company's revenue has declined by -5.5 per year over the past three years, which underperforms worse than 82.66% of 865 companies in the Semiconductors industry. Stagnating revenues may pose concerns in a fast-evolving market. Lastly, First Solar Inc's predictability rank is just one star out of five, adding to investor uncertainty regarding revenue and earnings consistency.

First Solar Inc's Diminishing Glow: A Deep Dive into Its GF Score

Conclusion

Given First Solar Inc's financial strength, profitability, and growth metrics, the GuruFocus Score Rating highlights the firm's unparalleled position for potential underperformance. While the company has a strong history in the Semiconductors industry, its recent performance and future prospects suggest that it may struggle to maintain its previous success. As value investors, it's crucial to consider these factors when making investment decisions.

GuruFocus Premium members can find more companies with strong GF Scores using the following screener link: GF Score Screen

This article first appeared on GuruFocus.