June 8, 2023
Top 10 Stock First Solar Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: First Solar – Top 10 Stock in Low Waste Leaders
First Solar is listed as a top 10 stock on June 08, 2023 in the market index Low Waste because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 17 (17% performer), Obermatt issues an overall sell recommendation for First Solar on June 08, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Semiconductors |
| Index | Energy Efficient, Human Rights, Low Waste, Recycling, Solar Tech, NASDAQ, S&P MIDCAP |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° Assessment First Solar Sell
| 360 METRICS | June 8, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 25 |
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| SENTIMENT | ||||||||
| SENTIMENT | 17 |
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| 360° VIEW | ||||||||
| 360° VIEW | 17 |
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ANALYSIS: With an Obermatt 360° View of 17 (better than 17% compared with alternatives), overall professional sentiment and engagement for the stock First Solar are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for First Solar. The consolidated Growth Rank has a good rank of 95, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 95% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 31 means that the share price of First Solar is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 69% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 25, which means that the company has a riskier financing structure than 75% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 17, indicating professional investors are more pessimistic about the stock than for 83% of alternative investment opportunities. ...read more
RECOMMENDATION: With a 360° View of 17, First Solar is worse than 83% of all alternative stock investment opportunities based on the Obermatt Method. This means that First Solar shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 95), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 17), the company is rather risky when it comes to financing (Safety Rank of 25). The negative market view on First Solar may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of First Solar compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for First Solar negative
ANALYSIS: With an Obermatt Sentiment Rank of 17 (better than 17% compared with alternatives), overall professional sentiment and engagement for the stock First Solar is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for First Solar. Analyst Opinions are at a rank of 19 (worse than 81% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 57, which means that stock research experts have found something to make them more positive about investing in the company. In other words, they are getting more optimistic of stock investments in First Solar. But the Professional Investors rank is low at 33, which means that professional investors hold less stock in this company than in 67% of alternative investment opportunities. Pros tend to invest in other companies. Market Pulse is also low at a rank of 6, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 94% of competitors). ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 17 (less encouraging than 83% compared with investment alternatives), First Solar has a reputation among professional investors that is far below that of its competitors. These are quite a few negative sentiment signals. One may want to trust the analysts that are changing their opinions. They may be early indications of better times, especially if the company is a smaller one. But If they are an extra large company, they should have more professional stockholders than are currently present. ...read more
Value Strategy: First Solar Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 31 (worse than 69% compared with alternatives), First Solar shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for First Solar. Price-to-Profit (also referred to as price-earnings, P/E) is 51 which means that the stock price compared with what market professionals expect for future profits is lower than for 51% of comparable companies, indicating a good value concerning First Solar's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 51, which means that the stock price is lower as regards to invested capital than for 51% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 71% of alternatives (only 29% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 99% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 31, is a HOLD recommendation based on First Solar's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: First Solar Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2023, First Solar shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for First Solar. Sales Growth has a rank of 92 which means that currently, professionals expect the company to grow more than 92% of its competitors. Both Profit Growth, with a rank of 100, and Stock Returns, with a rank of 100, are also above average. But Capital Growth only has a rank of 6, which means that, currently, professionals expect the company to grow its invested capital less than 94% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a BUY recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. ...read more
Safety Strategy: First Solar Debt Financing Safety below-average
| SAFETY METRICS | June 8, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 79 |
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| REFINANCING | ||||||||
| REFINANCING | 30 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 10 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 25 |
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ANALYSIS: With an Obermatt Safety Rank of 25 (better than 25% compared with alternatives), the company First Solar has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of First Solar is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for First Solar and the other two below average. Leverage is at a rank of 79 meaning the company has a below-average debt-to-equity ratio. It has less debt than 79% of its competitors.Refinancing is at a rank of 30, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 70% of its competitors. Liquidity is at a rank of 10, meaning that the company generates less profit to service its debt than 90% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 25 (worse than 75% compared with alternatives), First Solar has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of First Solar are on the safer side. ...read more
Combined financial peformance: First Solar Below-Average Financial Performance
| COMBINED PERFORMANCE | June 8, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 31 |
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| GROWTH | ||||||||
| GROWTH | 95 |
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| SAFETY | ||||||||
| SAFETY | 10 |
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| COMBINED | ||||||||
| COMBINED | 35 |
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ANALYSIS: With an Obermatt Combined Rank of 35 (worse than 65% compared with investment alternatives), First Solar (Semiconductors, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of First Solar are low in value (priced high) with a consolidated Obermatt Value Rank of 31 (worse than 69% of alternatives), and are riskily financed (Safety Rank of 25, which means above-average debt burdens) but show above-average growth (Growth Rank of 95). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 35, is a hold recommendation based on First Solar's financial characteristics. As the company First Solar shows low value with an Obermatt Value Rank of 31 (69% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 95% of comparable companies (Obermatt Growth Rank is 95). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 25 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for First Solar, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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