Solar energy solutions provider First Solar NASDAQ: FSLR
stock has been in a steady sell-off
since peaking at highs of $123.13 in November 2021. While shares initially ramped up due to rising oil prices
, they have decoupled as shares moved inversely. The surge in crude oil prices stemming from the Russian invasion of Ukraine
may have put in a floor for solar stocks as interest grows for clean and renewable energy. Despite supply chain disruption
, logistics, and inflationary pressures
, the Company is still making profits and showing nearly 50% annual top-line growth. The thin-film solar module leader is continuing to experience supply chain and logistics challenges
for its core business in U.S. However, its Japan project is in advanced negotiations for a potential sale. Prudent investors seeking a much lower-cost entry into a top solar player can watch for opportunistic pullbacks in shares of First Solar.
Q4 Fiscal 2021 Earnings Release
On March 1, 2022, First Solar released Q4 fiscal 2021 results for the quarter ending in December 2021. The Company reported earnings per share (EPS) of $1.23 excluding non-recurring items, beating consensus analyst estimates of $1.06, by $0.17. Revenues rose 48.9% year-over-year (YoY) to $907.32 million, missing analyst estimates for $907.32 million. First Solar CEO Mark Widmar commented, ““I would like to express my gratitude to the entire First Solar team for their hard work and perseverance in a year where much of the solar PV manufacturing industry faced supply chain, logistics, cost, and pandemic-related challenges. Despite these dynamics, our full year 2021 earnings per diluted share result came in above the mid-point of the guidance range we provided at the time of our third quarter earnings call and is solidly within the original guidance range provided last February.” He continued, “This pivotal year will revolve around continued significant investment in R&D, new products, manufacturing expansion, and employing new contracting strategies, all of which we believe set the stage for sustained growth in 2023 and beyond.”
Full-Year 2022 Mixed Guidance
First Solar raised its full-year fiscal 2022 earnings guidance with EPS ranging between $0.00 to $0.60 versus consensus analyst estimates for $1.93. Full-year fiscal 2022 revenues are estimated between $2.4 billion to $2.6 billion but still below consensus analyst estimates for $2.73 billion. The Company expects year-end 2022 cash balance in the range of $1.10 billion to $1.35 billion.
Conference Call Takeaways
CEO Widmar reviewed some key metrics for the Company in 2021 including 7.9 gigawatts of production and securing 17.5 gigawatts of net bookings carrying 4.8 gigawatts into 2022. The Company reduced cost per gigawatt produced water by (-6%). First Solar expanded capacity to deliver nearly 16 gigawatts in 2024. The Company has plans to build its next generation Series 7 solar panels in Ohio and India. They expect two of the Series 7 factories to go online in 2023 which will reduce cost of sales freight which in turn will bolster gross profits between $0.01 to $0.03 per watt compared to Series 6 fleets. Logistics challenges increased by weeks between Q3 and Q4 to nearly double historical levels. U.S. port congestion continued throughout the holidays. The Company expects higher freight costs with worsening carrier performance as a result of load to truck ratios hitting the highest levels in years. The Company received an unsolicited offer for its Japan project and O&M platform. They are in advanced stages of negations for the sale.
FSLR Opportunistic Pullback Levels
Using the rifle charts on weekly and daily time frames provides a precision view of the landscape for FSLR stock. The weekly rifle chart downtrend formed an initial bottom near the $61.50 Fibonacci (fib) level. The weekly downtrend may be stalling on a slowing 5-period moving average at $69.39 followed by the 15-period MA at $82.26. The weekly 200-period MA is attempting to hold support at $67.03. The weekly stochastic coiled but still under the 10-band. The weekly market structure low (MSL) buy triggers on a breakout through $76.94. The weekly lower Bollinger Bands (BBs) sit at $50.29. The daily rifle chart uptrend has stalled as the 5-period MA flattens at $71.69 as shares collapsed through the 15-period MA at $69.95 with lower BBs at $63.26. The daily stochastic peaked under the 80-band attempting a crossover. Prudent investors can watch for opportunistic pullback levels at the $65.53, $63.48 fib, $61.50 fib. $59.53 fib, $56, $52.89 fib, $48.23 fib, and the $43.57 fib level. Upside trajectories range from the $84.35 fib up towards the $109.96 fib level.
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