Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- First Solar
) has been reiterated by TheStreet Ratings as a sell with a ratings score of D . The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins and generally disappointing historical performance in the stock itself.
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Highlights from the ratings report include:
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, FIRST SOLAR INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The gross profit margin for FIRST SOLAR INC is currently lower than what is desirable, coming in at 33.60%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 11.60% trails that of the industry average.
- FSLR's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 73.92%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- FIRST SOLAR INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FIRST SOLAR INC swung to a loss, reporting -$0.50 versus $7.68 in the prior year. This year, the market expects an improvement in earnings ($4.46 versus -$0.50).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income increased by 81.5% when compared to the same quarter one year prior, rising from $61.14 million to $110.98 million.
First Solar, Inc. engages in the design, manufacture, and sale of solar modules using a thin-film semiconductor technology in the United States and internationally. The company is also involved in the design, construction, and sale of photovoltaic solar power systems. First Solar has a market cap of $1.89 billion and is part of the
industry. Shares are down 26.6% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.