It isn't a surprise, in and of itself, to see First Solar (NASDAQ:FSLR) gain in the market. After all, people have at least some interest in making their own electricity at home. The gains seen, however, are much more substantial that some likely expected, and the latest results posted are little more than a further example of an already-established theme.
Electrifying Sales Figures
Extended trading action on Thursday saw the company gain 12%, as it detailed some truly staggering gains in its sales figures. Sales this year were actually up 70% against the same time last year, which triggered a series of gains in other figures as well.
First Solar managed to bring in $928 million in revenue, which translated into an earnings per share (EPS) figure of $1.45. Given that consensus estimates called for $676.5 million in revenue for an EPS figure of $0.63, it's safe to call the consensus quite thoroughly destroyed. The figures only get better when you compare them against the same time last year, where the company brought in $546.8 million in total revenue for an EPS figure of $0.29.
Things actually managed to get better from there; the company brought back its full-year guidance, which it—like so many others—had suspended thanks to the coronavirus outbreak. Now, the company expects to bring in between $2.6 billion and $2.9 billion total for 2020, which, given the earlier-stated revenue figures, may actually be in its grasp.
Not Just Domestic Operations
It would be easy to think that the trend found in the United States of high-scale home improvement brought about by spending a whole lot more time at home than normal, but sales abroad also kicked in quite a bit of gain. The 44.5% jump seen between the latest quarter and the one immediately before it came mainly as a result of international sales, reports note. Third-party module sales also contributed substantially.
Ahead of the initial reports, UBS sent out a note to its customers that called particular attention to ramping-up sales figures worldwide. According to the note, First Solar's order backlog is continuing to expand, which is providing extra visibility into 2021's sales figures. UBS felt strongly enough about First Solar's chances to downgrade several other firms in the solar energy field, including SunPower (NASDAQ:SPWR) and SolarEdge (NASDAQ:SEDG).
Not every analyst is in First Solar's camp as hard as UBS seems to be, however. Our latest research shows that sentiment has fallen off a bit for the company, though not to a serious degree. The company currently has a “hold” consensus rating, as it's had for the last 90 days, with two “sell” ratings, five “hold” ratings, and eight “buy” ratings. The price target, however, has exploded, going from $61.15 180 days ago to $80.86 today. That new price target actually represents a significant downside over current prices, so the analysts may be a bit behind the curve on this one.
In fact, just today, three analysts hiked price targets. Barclays boosted its target from $45 to $86, and Raymond James went from $80 to $90. Robert W. Baird had a major upgrade too, going from $97 to $125. There's been quite a bit of shifting in analyst sentiment on this stock in the last two weeks, which suggests there may be a breakout to come.
Does Home Improvement Include Power Generation?
It's no secret that the growing amount of time people have spent at home these days has resulted in a home improvement bonanza. We've seen companies from Nautilus (NYSE:NLS) to Michaels (NASDAQ:MIK) gain ground as people stop going out for one reason or another and focus on brightening the corner where they are.
Moreover, with growing numbers of people working from home, supplementary power stops being a luxury and starts being a necessity; when you work from home, it's hard to tell your boss that you can't work because the power's out at home. Having a backup system in place can mean the difference between a stalled workday and business as usual, and First Solar can be a help in that. While First Solar has more commonly focused on utility-scale operations, there's likely been more demand on that front too as companies seek to improve their optics in the community using more solar operations as the key to get there.
First Solar seems to benefit from some overall shifts in consumer thought; between a growing desire for green power and a growing desire for always-available power even in grid outages, more people are thinking solar on one scale or another. This could be a big help to the company going forward, and has already delivered gains so far.
Companies in This Article:
