First Solar Stock Surges as Solar Sector Gains Momentum

The solar power industry is witnessing a remarkable resurgence, with First Solar positioned directly at the heart of this expansion. While numerous solar companies continue to grapple with the aftermath of previous sector downturns, this US-based manufacturer is demonstrating robust performance in a volatile market environment. However, questions remain about whether the stock's impressive run can persist in light of varied quarterly results and notable insider selling activity.

A key component of First Solar's strategy involves a dedicated expansion within the United States. The company's plans to construct a new manufacturing facility boasting 3.7 gigawatts of capacity highlight its commitment to domestic production. This focus aligns seamlessly with the current energy policy priorities of the US government.

In a particularly strategic maneuver, the company successfully renegotiated several contracts. Following cancellations by BP, First Solar is now actively seeking new customers for 6.6 gigawatts of its production capacity. Crucially, these new agreements are being established at significantly improved terms, priced at $0.36 per watt.

Quarterly Performance: A Mixed Picture

First Solar's third-quarter results presented a compelling yet complex financial snapshot. Revenue surged to $1.59 billion, surpassing analyst projections. Even more indicative of strong market demand was the record-breaking delivery of 5.3 gigawatts of solar modules.

Despite these top-line strengths, the earnings report wasn't without its challenges. Earnings per share slightly missed market expectations, which management attributed primarily to costs associated with temporary underutilization of manufacturing capacity. Consequently, profit margins remained under pressure, even as core operational activity continued to show significant strength.

Should investors sell immediately? Or is it worth buying First Solar?

Analyst Optimism Fuels Stock Rally

The market's response to these developments was swift and decisive. Following the earnings release, First Solar's stock price jumped 14.3%. The equity has advanced 20% over the past month alone, contributing to an annual performance that exceeds 50%.

The analyst community has responded with notable enthusiasm. UBS raised its price target to $330, while Mizuho set an even higher target of $335. The consensus price target from 33 covering firms stands at $270, suggesting that despite the recent powerful uptrend, further potential upside is anticipated.

Insider Transactions Raise Questions

While institutional investors, who own 92% of the company, maintain their strong support, a recent development has given some market observers pause. Chief Commercial Officer Georges Antonne sold shares valued at $9.9 million, reducing his personal stake by more than 70%.

Notwithstanding this transaction, the overall market sentiment remains positive. The company's guidance for the full 2025 fiscal year projects earnings between $14 and $15 per share, signaling a confident outlook on continued profitability.

The central question for investors is whether First Solar can extend its leadership within the solar industry, or if the stock is due for a period of consolidation after its spectacular rally. The answer is likely to have significant implications for the broader renewable energy sector.