First Solar’s stock performance
Before summing up our analysis on First Solar (FSLR), let’s have a look at the performance of its stock price since the beginning of 2014.
Performance in 2014
While 2014 started dull, First Solar gained over 20% on March 19, 2014, after announcing efficiency gains and low costs as well as on strong guidance. However, oil prices plummeted in the latter half of 2014, taking all energy stocks down—including coal and oil companies.
Even renewable energy stocks didn’t escape the whirlwind, as low fossil fuel prices led to skepticism about the viability of renewable energy projects. First Solar (FSLR) was the biggest loser among the top solar stocks in the second half of 2014, shading off 36.9%. During the same period, SunEdison (SUNE) lost 15.6%, while SunPower (SPWR) lost 36.2%. Among ETFs, the Guggenheim Solar ETF (TAN) lost 23.1%, while the broad-based SPDR S&P 500 (SPY) gained 4.3%.
First Solar bounces back
However, First Solar has bounced back since then—primarily for two reasons:
- the announcement of plans for a yieldco with SunPower
- an earnings surprise
The first announcement came on February 23, followed by earnings on the next day. The yieldco is expected to unlock value in the company. Earnings came in as a surprise, as the company reported more than twice the net income expected by analysts in 4Q14. As a result, the stock climbed 19.3% in two days (February 24–25).