The First Solar story

What drives the business

• First Solar is the world's largest thin-film solar module manufacturer, using cadmium telluride technology and an integrated production process that does not rely on Chinese crystalline silicon supply chains.
• Its Series 7 modules combine a larger format with a steel mounting structure designed to reduce installation time, while manufacturing expansion in Ohio, Alabama and Louisiana supports its domestic production strategy.
• The South Carolina finishing facility is intended to bring final production steps for internationally initiated modules into the United States, with operations expected to begin in the second half of 2026.
• The 45.1 GW contracted backlog at June 30, 2026 extends through 2030, giving the factory expansion a multiyear base of customer commitments.
• Manufacturing tax credits are central to the economics: 2026 gross profit guidance of $2.4 billion to $2.6 billion assumes $2.10 billion to $2.19 billion of Section 45X credits, and October 2025 transfer agreements with an unnamed leading digital payments company illustrate how First Solar converts credits into cash.

What the price assumes

At $172.97, the reverse DCF implies free cash flow after stock pay grows 0.3% a year for ten years, using a 10.2% discount rate.

That compares with delivered growth of -29.2% a year over the last 10 years and the TenQ check's bar of -12.6%, which moves the historical rate halfway toward 4%.

The price therefore requires a better cash-growth record than that check allows, despite $1.5 billion of free cash flow over the last twelve months and an 8.1% free cash flow yield.

Value FSLR on your own assumptions

What could change the story

• The 2026 outlook depends on US policy and permitting timelines remaining consistent with its assumptions, while aggregate tariffs of 40% on imported solar modules and 27.5% on cells add uncertainty for project development.
• Contracted backlog remains exposed to customers' financing and ability to perform, including the possibility of contract terminations.
• Revenue growth of 23.8% over the last twelve months trails the 25.8% annual pace over the last three years, failing TenQ's growth-acceleration check.
• Adjusted EBITDA excludes stock compensation, tax credit transfer discounts, underutilization and production start-up costs, so its 61% margin in the quarter to June 2026 does not capture all the costs and cash demands of expansion.
• Pending patent applications may not become issued patents or provide meaningful protection, while infringement or misappropriation could weaken the technology differentiation behind First Solar's manufacturing strategy.

What to watch next

• For the third quarter of 2026, First Solar expects module sales of 3.9 GW to 4.5 GW, including 3.2 GW to 3.7 GW from US manufacturing, and adjusted EBITDA of $625 million to $775 million.
• The reaffirmed 2026 outlook calls for volume of 17.0 GW to 18.2 GW and net sales of $4.9 billion to $5.2 billion, making shipment progress and changes in contracted backlog important measures of execution.
• South Carolina's operating start, working-capital needs and tax credit cash receipts will help explain progress toward 2026 net cash guidance of $1.7 billion to $2.3 billion alongside capital expenditures of $0.8 billion to $1.0 billion.

Sources

• First Solar's earnings release, filed with the SEC
• Its latest 10-Q or 10-K, for the risk factors
• The FSLR stock report, for every figure and check