First Solar Stock (FSLR) Great Growth and Good Value in Q3 2025

First Solar (NASDAQ:FSLR) continues to stand out as one of solar industry strongest contenders. Following its impressive Q3 2025 earnings report, the company has showcased not only rapid revenue expansion but also meaningful improvements in margins, earnings, and cash flow. As global demand for clean energy intensifies and supportive policies boost domestic solar manufacturing, First Solar’s unique technology and financial strength place it in a compelling position for future growth. In this article we will dive into First Solar recent earnings, stock performance & valuation, growth potential, and the risks investor should consider.

About First Solar

First Solar, founded in 1999 and headquartered in Tempe, Arizona, is a leading global producer of photovoltaic (PV) solar modules using proprietary thin-film Cadmium Telluride (CdTe) technology, which sets it apart from traditional silicon-based panels. As the only major U.S.-based solar panel manufacturer, the company focuses on cost-efficient, high-performance, and environmentally sustainable modules. Its CdTe technology reduces production costs and carbon footprint, and First Solar plans to expand its global manufacturing capacity to more than 21–25 GW by 2026.

First Solar Financial Performance

First Solar delivered a strong financial performance in Q3 2025, highlighted by significant year-over-year growth across key metrics. Revenue for the quarter reached $1.59 billion, a 79.67% increase from $887.67 million in Q3 2024, while quarterly EPS rose to $4.24, up 45.7% from $2.91 a year earlier. On a trailing-twelve-month basis, revenue climbed to $5.05 billion compared to $3.85 billion in Q3 2024, an increase of 31.16%, and TTM EPS improved to $13.03 from $12.02, growing 12.25%. Free cash flow per share (TTM) showed a dramatic turnaround, rising to $5.72 from –$5.50, representing a 204% improvement. Profitability remains strong, with a Gross profit margin of 40.05%, Net profit margin of 27.73%, and Free cash flow margin of 12.17%. The company also maintains solid efficiency and financial health, reporting a Return on assets of 7.56%, Return on equity of 16.86%, and a low 0.1 debt-to-equity ratio.

Over the past five years, First Solar has grown its revenue at a 14% CAGR, increased its net income by 30.3%, and turned free cash flow positive this year. The company has delivered consistent growth in the past and is still projected to expand its EPS rapidly in the coming years.

First Solar Fiscal 2025 Financial Forecast

Looking ahead, analysts forecast 2025 revenue of $5.11 billion, a 21.45% increase from $4.21 billion in 2024, and expect non-GAAP EPS of $14.62, up 21.63% from $12.02 in 2024. Wall Street maintains a positive outlook, with a consensus Buy rating, a price target of $271.61 offering 4.32% upside, and a high-end estimate of $335, implying 28.67% potential upside.

FSLR Stock Price Performance and Valuation

At the time this article was written First Solar’s stock was trading at $260.36 per share. First Solar has delivered impressive returns, rising 35% over the past year and significantly outperforming the S&P 500’s 12.9% gain in the same period. Its long-term performance is even stronger, with the stock climbing 174.9% over the past five years compared to the S&P 500’s 85.6% increase. 

Despite this strong appreciation, the company’s valuation remains reasonable for a high-growth, high-margin solar leader. First Solar trades at a price to sales P/S ratio (TTM) of 5.51, a forward P/S of 5.46, the non-GAAP price to earnings P/E ratio (TTM) of 19.96, a forward P/E of 17.77 which is quite low for a high growth company. While price to free cash flow P/FCF ratio (TTM) is 45.46.

Based on Fiscal.ai data, looking at the valuation since 2023, the forward P/S is above the historical average, while the forward P/E for fiscal 2026 is below the average. These metrics suggest the stock is not overly expensive relative to its earnings power, strong margins, and projected growth.

First Solar Growth Potential

First Solar growth potential remains strong, driven by several factors.

• Substantial Contracted Sales Backlog with Multi-Year Revenue Visibility
  First Solar has built an impressive contracted sales backlog of 53.7 gigawatts valued at $16.4 billion as of September 30, 2025, with bookings extending through 2030. During Q3 2025 alone, the company secured 2.7 GW of gross bookings at an average selling price of 30.9 cents per watt. Additionally, the company identified 79.2 GW of potential booking opportunities, with 17.8 GW in mid-to-late stage negotiations, predominantly from the US market. This substantial backlog provides exceptional revenue visibility and reduces execution risk for investors, as the company can forecast revenue streams well into the future.
  The multi-year nature of these contracts insulates First Solar from short-term market volatility and provides confidence in achieving guidance targets. The combination of confirmed backlog and pipeline opportunities demonstrates strong market acceptance of First Solar's products and validates the company's competitive positioning in the global solar market.
• Aggressive US Domestic Manufacturing Capacity Expansion
  First Solar  is strategically expanding its U.S. manufacturing capacity to benefit from domestic incentives and regulatory support. It recently opened a $1.1 billion Alabama facility, adding 3.5 GW of capacity, and launched a plant in Louisiana in August 2025. A fifth U.S. plant with 3.7 GW annual capacity is under construction, expected to start production in late 2026 and fully ramp up by mid-2027.
  First Solar aims to reach 14 GW of U.S. capacity and 25 GW globally by the end of 2026. This growth is supported by the Inflation Reduction Act’s 30% construction tax credits and rules that limit Chinese manufacturers' access to the U.S. market. This expansion enhances supply chain resilience and could boost the company's valuation, offering significant upside for long-term investors.
• Superior Technology with Thin-Film Cadmium Telluride Advantages
  First Solar ’s proprietary thin-film cadmium telluride (CdTe) technology offers substantial advantages over traditional crystalline silicon competitors. Its Series 6 and Series 7 modules perform better in harsh climates, with a lower temperature coefficient approximately -0.28% per °C than silicon panels -0.40% to -0.50%, maintaining more energy in hot conditions. The thin-film tech yields superior energy in low-light, diffuse, and humid environments, ideal for diverse markets like Southeast Asia and coastal areas where silicon degrades faster.
  First Solar’s modules retain over 90% efficiency after 25 years, with a leading 0.3% annual degradation rate, enhancing long-term value for utilities. The company is advancing with higher-output CuRe modules launching in early 2026 and perovskite research to further boost efficiency. It also integrates quantum dot tech into bifacial designs, doubling quantum efficiency in certain wavelengths, reinforcing its industry-leading technology and premium pricing power.

Risks to Consider

While First Solar looks like a compelling investment opportunity we should be mindful of potential risks.

• Trade and Tariff Risks
  Ongoing U.S. tariffs and trade investigations on solar imports from Southeast Asia and China are creating major challenges for First Solar. The tariffs raise manufacturing costs, disrupt supply chains, and add uncertainty to operations. As a result, First Solar has cut 2025 production in Malaysia and Vietnam by 1 GW and faces the risk of further idling. These shifting policies make production planning difficult and reduce profitability, especially for U.S.-bound exports.
• Competition and Market Demand
  Increasing competition from Chinese solar panel manufacturers and emerging companies is putting pressure on First Solar ’s market share. Chinese firms benefit from lower costs and dominate global markets, challenging First Solar’s position. Additionally, global demand for photovoltaic panels is variable and uncertain, which poses risks to consistent sales growth. First Solar’s efforts to innovate and focus on the U.S. market aim to counterbalance these competitive and market demand challenges.
• Policy Uncertainty
  The potential repeal or reduction of critical tax credits, such as the 45X Advanced Manufacturing Production Tax Credit and accelerated solar tax incentives, could significantly impact First Solar . These tax credits support demand and profit margins by incentivizing domestic solar panel production. Any phase-out or limitation would reduce financial benefits, increase costs, and lower demand for First Solar's products, thus impairing profitability and growth prospects despite the company’s current advantage in U.S.-based manufacturing.

Read More: On Holding AG Stock (ONON) Good Growth and Good Value in Q3 2025

Conclusion

First Solar’s strong financial performance, accelerating revenue and earnings growth, and solid profitability make it a standout player in the renewable energy sector. Its consistent stock outperformance, reasonable valuation, and expanding global capacity further strengthen its long-term investment appeal. While risks such as policy changes and industry competition remain, the company’s technological advantages, improving cash flow, and favorable market outlook position it well for continued growth. Overall, First Solar presents a compelling opportunity for investors seeking sustainable, long-term value.

I am offering a stock investing service at an affordable price to help you navigate the U.S. stock market. 

Here is the link to my service