Analyst Moses Sutton also cut his price target on the Tempe, Ariz., company to $49 from $66.
In a note to investors, Sutton said that after he assessed industry data on 5,000 projects, both operational and in the company's pipeline, he determined that First Solar's Systems business "is in trouble."
Sutton explained that he was not making a bear call on U.S. solar, nor is First Solar's module business at risk. But the company's systems business has lost 80% of its U.S. market share, with NextEra Energy (NEE) - Get Report, EDF and Invenergy gaining share.
Sutton expects First Solar's "rapidly declining share" of the U.S. downstream project market to cause a downward rerating of the shares.
The report comes as the Trump administration plans to authorize a roughly 3,000-acre solar farm near Palm Springs, Calif., that is being developed by Desert Quartzite, a subsidiary of First Solar.
The Interior Department said the farm, which is expected to be in operation by 2022, would produce enough electricity to power about 117,000 homes while providing about $2.7 million in annual rent and fees to the U.S. Treasury, Bloomberg reported.
No utility has yet signed an agreement to purchase power generated at the site.
Developers scaled back the size of the project to help avoid threatened desert tortoises and cultural artifacts.
President Donald Trump has been a harsh critic of renewable energy and has claimed that solar power is "very, very expensive."
In October, the company posted third-quarter net income of $30.6 million, or 29 cents a share, vs. $57.6 million, or 54 cents, in the year-earlier quarter. Analysts polled by FactSet had been expecting $1.07 a share.
Revenue came in at $546.8 million, a bit more than half the $1.03 billion forecast by analysts surveyed by FactSet.
At last check First Solar shares were 8.3% lower at $53.92.