On September 9, Piper Sandler initiated coverage of First Solar, Inc. (NASDAQ:FSLR), giving the stock an Overweight rating and setting the price target at $260. The research firm believes that the market is treating the company mainly as a policy-driven stock whose benefits will expire when the 45X tax credit ends.
Piper Sandler, however, sees First Solar, Inc. very differently. The firm pointed out that the company has the lowest-cost, fully domestic, vertically integrated supply in a market facing limited domestic capacity
The research firm’s estimates are more conservative than consensus on volume but more optimistic on margins. By fiscal 2028, Piper Sandler expects First Solar, Inc.’s gross margin to reach about 60%, which is higher than the 56% consensus estimate. The firm also expects adjusted earnings per share of $28.46, above the $27.76 consensus estimate.
First Solar, Inc.’s recent results also showed improved profitability. For the second quarter of 2026, the company reported net sales of $1.06 billion, down 4% year-over-year. The decline was primarily driven by lower revenue associated with customer contract terminations, partly offset by higher module sales to third parties.
However, at the same time, profitability improved. The company reported Q2 net income of $423 million, or $3.92 per diluted share, compared with $342 million, or $3.18 per diluted share, in the second quarter of 2025. Adjusted EBITDA also increased to $644 million from $560 million in the second quarter of 2025.
The company’s cash position, however, weakened during the first half of the year. As of June 30, 2026, First Solar, Inc. had a net cash balance of $1.7 billion, down from $2.4 billion as of December 31, 2025. The decline was mainly driven by seasonal working-capital needs and capital spending, primarily for its South Carolina finishing facility.
Despite the improvement in earnings, the stock has struggled. As of September 9, shares were down approximately 22% year-to-date. The company also faces several risks, including potential changes to US tax credits and tariffs, as well as growing competition that could put pressure on margins.
What the Numbers Say
Hedge fund interest in First Solar, Inc. has also declined slightly. According to Insider Monkey‘s database, 64 hedge funds held positions in the stock in the second quarter of 2026, down from 67 in the first quarter.
At the same time, short interest remains relatively high, with short interest at 11.86% of the company’s float as of August 14.
Still, analysts remain largely positive on the stock with a consensus Buy rating. From a valuation perspective, First Solar, Inc. also appears relatively cheap compared with the broader sector. The stock currently trades at 9.27 times forward earnings, well below the sector median forward P/E of 22.86.
The company’s solid earnings, expected margin growth, and relatively low valuation could give investors reasons to look past the recent stock weakness. However, the company will need to maintain its margin advantage while navigating policy risks and growing competition.
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