First Solar

Methodology

First Solar's thin-film solar panel manufacturing business shows earnings volatility from project timing, policy changes, and polysilicon pricing dynamics. The U.S. manufacturing focus benefits from IRA incentives but creates cost structure challenges. Fair value calculations require careful assumptions about sustainable margins and module pricing in competitive global solar markets.

Methodology

First Solar trades at variable PEG ratios (1.5-3.5x) depending on policy tailwinds and concerns about Chinese competition despite tariff protections. The company's technology differentiation and U.S. manufacturing support premium valuations during favorable policy environments. PEG becomes more meaningful as IRA benefits provide multi-year earnings visibility.

Methodology

First Solar doesn't pay dividends and reinvests cash flow into manufacturing capacity expansion to capture IRA-driven demand. Management focuses on building production scale and technology leadership. Total return depends entirely on successful execution of capacity expansion and maintaining competitive positioning against lower-cost Asian manufacturers.