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 ( TheStreet) -- First Solar (Nasdaq: FSLR) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and increase in net income. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and a generally disappointing performance in the stock itself.
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- FSLR's very impressive revenue growth greatly exceeded the industry average of 12.3%. Since the same quarter one year prior, revenues leaped by 62.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- FSLR's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FSLR has a quick ratio of 1.79, which demonstrates the ability of the company to cover short-term liquidity needs.
- 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 reported poor results of -$1.19 versus -$0.50 in the prior year. This year, the market expects an improvement in earnings ($4.03 versus -$1.19).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. 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 27.30%. It has decreased significantly from the same period last year. Along with this, the net profit margin of 14.34% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff