Some surprising names have proven remarkably resilient during the early April tariff-related volatility characterizing the wider market.
While the S&P 500 is down about 7% in the five days leading to morning trading on Apr. 8, 2025, solar energy leader First Solar Inc. (NASDAQ: FSLR) has climbed by roughly 4.5% during the same period.
The stock has struggled over the past several quarters. Despite recent gains, it remains down more than 28% year-to-date (YTD) and 25% over the 12 months leading up to Apr. 8.
Investors are likely wondering how a company that has struggled in recent months also managed to weather several days of a broader downturn so well.
Compelling Valuation and Fundamentals
First Solar's gradual decline in the last several quarters has at least one potential upside for investors in 2025: the firm now has an attractive valuation. First Solar's price-to-sales ratio is just 3.3, and its forward P/E ratio is 10.0. Beyond that, the company has a number of other compelling fundamentals, including a return on equity (ROE) of 17.6% and net margins of 32.4%. In the fourth quarter, it posted a 30.7% year-over-year (YOY) net sales improvement as gross profit climbed by more than 13% over the same period.
So, what’s behind the sell-off in First Solar shares over the past year? The stock surged in May 2024 on investor excitement that booming energy demand from artificial intelligence (AI) could drive greater adoption of First Solar’s products. However, that early hype has faded, as many companies with significant AI energy needs have shifted toward nuclear and other energy sources. First Solar may still capture some interest, but it no longer appears to be the primary beneficiary of the AI-driven energy boom.
FSLR shares are down over the medium term largely due to their performance relative to the price spike in spring 2024. Zooming out, the company's stock price has still more than tripled in the last five years.
Resilience Amid Tariff Landscape
First Solar's operations are largely within the U.S., and the company makes the vast majority of its revenue domestically, meaning that it is unlikely for First Solar's operations and business to be heavily impacted by tariffs. This gives the company a huge leg up on competitors that rely on materials and components from Southeast Asia, as these exporters have been particularly heavily impacted by the Trump administration's latest round of tariffs.
This benefit is especially important for First Solar as investors have anticipated that the administration's general approach to solar and other forms of renewable energy will be less favorable compared to the Biden administration's.
Nonetheless, momentum in terms of total capacity growth across solar energy was strong in 2024. More solar energy generation capacity—about 50 gigawatts—was added to the U.S. power grid in 2024 than by any other single energy source in roughly two decades. As one of the largest solar companies in the country, First Solar is well-positioned to continue to benefit if this trend continues.
Analysts Are Optimistic
[content-module:Forecast|NASDAQ: FSLR]Wall Street analysts still view First Solar as a worthwhile opportunity, with 25 Buy ratings and just three Holds supporting the bullish case.
In April, three firms reiterated a Buy—Bank of America, Guggenheim, and Truist Financial—although each has also lowered its price target for FSLR shares.
Still, First Solar stock has a consensus price target of $257.42, about 95% above the price at which the stock is trading on Apr. 8, 2025.
Besides a general optimism in First Solar's share price potential, analysts are also bullish on the company's earnings growth.
First Solar has projected an earnings improvement of 56.1%.
A Cautious Buy? First Solar Shows Signs of a Turnaround
With market uncertainty causing wild swings in early April, investors may be cautious to enter any new position. Still, First Solar's resilience during volatile periods, its strong valuation and fundamental metrics, its compelling core business, and overall analyst optimism may be fueling a turnaround after months of declines.
Though administrative regulations remain a question mark, and the solar industry in general faces challenges due to tariffs, investors with cash to invest might revisit this leading solar energy company as the U.S. energy grid continues to transform.
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