First Solar (FSLR) Gets A Truist Upgrade, Is It 32% Undervalued?

First Solar (FSLR) is back in focus after a Truist Securities analyst upgrade, tied to expectations for firmer U.S. module pricing, robust utility-scale demand through 2035 and supportive import restrictions on rival polysilicon products.

Recent trading tells a mixed story. First Solar’s share price has slipped around 14% over the past month and about 34% year to date, yet the Truist upgrade and related gains follow a longer stretch where total shareholder return over five years is about 71%. Recent momentum has been weak even as the longer record remains positive.

Scan for other solar and clean energy players that have been reset by recent selloffs by checking the hand picked 29 high quality undervalued stocks that may share features with First Solar’s setup.

Bulls point to First Solar’s policy support, thin film edge and analyst targets, while bears focus on tax credit risk and recent share price weakness. Which story does today’s valuation actually tell?

Most Popular Narrative: 32% Undervalued

Against First Solar’s last close at $179.72, the most followed valuation story pegs fair value at $263, implying a wide gap that policy risk alone does not fully explain.

First Solar is the only scaled U.S. thin-film module maker with a multi-year contracted book, domestic-content advantage, and Section 45X credits running through the early 2030s. Q2 2026 showed the earnings power of that setup, revenue was a little light year-on-year, margins and EPS were not.

See why 24 investors see First Solar as 32% undervalued.

According to andrei9868, this gap exists because the market is heavily focused on what could happen to policy from 2028 to 2032, while a large part of First Solar’s near term is already locked in by contracts. The narrative points to a $13.6b, 45.1 GW backlog that runs through 2030 and to U.S. factories that are substantially committed through 2028, which gives more earnings visibility than the recent share price slide suggests.

The same storyline highlights that earnings growth and profitability are already visible in the reported numbers. Earnings grew 38.9% over the past year, profit margins are 32.5%, and net income growth is running at 16% annually, with Simply Wall St’s fair value model and the narrative both sitting well above the current $179.72 share price.

At the same time, the narrative does not ignore the other side of the ledger. It flags that First Solar’s earnings are forecast to grow 16% per year, which is slightly slower than the broader U.S. market at 17.4%, and that return on equity at 16.9% is below the 20% threshold Simply Wall St uses for a high level. It also stresses that earnings quality is high and that the business has grown profit at 40.3% per year over five years, but that investors are still assigning a discount because the policy framework underpins a meaningful portion of that profitability.

For readers weighing this, the key question is whether the approximately 32% discount to the narrative fair value of $263 reflects a reasonable buffer against those policy and growth risks, or whether the current $179.72 price already bakes in more pessimism than the contracted backlog and recent earnings justify.

Result: Fair Value of $263 (UNDERVALUED)

Still, if Section 45X support is cut early or new U.S. bookings reset closer to India-like pricing, the First Solar valuation story could change quickly.

Find out about the key risks to this First Solar narrative.

Next Steps

Feeling torn between First Solar’s policy risk and its contracted backlog story is reasonable. Act quickly and inspect the underlying figures yourself before opinions settle. To see which potential upsides analysts are focusing on, take a closer look at the 4 key rewards.

Looking for more investment ideas beyond First Solar?

If First Solar has sharpened your focus on where risk and reward meet, treat this as a starting point and widen your search before the next leg of the market sets up.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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