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FSLR: Comparing Solar Stocks’ Latest Valuations

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Valuation

Let’s look at the current valuations for the top solar stocks in this part of our series. First Solar (FSLR) stock is currently trading at a forward EV-to-EBITDA valuation of 7x, based on analysts’ earnings estimates for 2019. In comparison, its peer solar stocks (TAN), on average, are trading at a valuation of 12x.

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Will the rally continue?

SunPower (SPWR) stock is trading at a forward EV-to-EBITDA multiple of 18x, much higher than First Solar. Canadian Solar (CSIQ) is trading at 7x. CSIQ stock has significantly outperformed peers this year. It’s up more than 60% year-to-date.

First Solar stock seems attractive on the valuations front, given its lower multiple compared to peers. Its strong potential growth for the next few years makes it even more attractive.

The chart above compares stock price movements for First Solar and its peers along with broader markets. Despite First Solar’s recent uptrend, it lags far behind peers in longer-term market performance. First Solar stock has fallen more than 20% over the past 12 months. SunPower is down about 10%, meanwhile.

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