Despite spiking as much as +6% in Monday’s trading session, First Solar FSLR stock is still 37% from its 52-week high of over $300 a share last June.

That said, shares of the largest solar company in the United States have now risen +9% in January and investors may be wondering if an extended rebound is in store for FSLR.

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Lower Market Sentiment for FSLR

Although First Solar is one the world’s largest providers of solar panels, market sentiment has been wayward for FSLR after the company came short of its Q3 top and bottom line expectations in October.

Third quarter sales of $887.67 million rose 10% from a year ago but noticeably missed estimates of $1.06 billion. On the bottom line, Q3 EPS of $2.91 spiked 16% year over year but fell short of expectations of $3.10.

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Of course, First Solar’s Q4 results on February 25 will be critical in the hopes of regaining investor sentiment. Based on Zacks estimates, First Solar’s Q4 sales are expected to increase 27% to $1.47 billion with EPS projected to soar 47% to $4.77.

However, the Zacks ESP (Expected Surprise Prediction) does indicate First Solar could once again miss EPS expectations with the Most Accurate Estimate having Q4 earnings pegged at $4.57 per share and 4% below the Zacks Consensus.

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Tracking First Solar’s Growth Trajectory

First Solar’s immense probability continues to separate the company from many of peers including domestic competitor Sunrun RUN.

With Sunrun still striving to cross the probability line, First Solar’s annual earnings are now slated to expand 69% in fiscal 2024 to $13.13 per share versus EPS of $7.74 in 2023. More impressive, FY25 EPS is projected to climb another 54% to $20.14 based on Zacks estimates.

Notably, First Solar is expecting high double-digit sales growth in FY24 and FY25 as well with projections edging north of $5 billion.

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Monitoring First Solar’s Valuation

Alluding to the notion that an extended rebound could be in store for First Solar’s stock at some point is that FSLR trades at 9.2X forward earnings. This is a sharp discount to the benchmark S&P 500’s 22.2X and nicely beneath its Zacks Solar Industry average of 15.2X.

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Bottom Line

For now, First Solar stock lands a Zacks Rank #3 (Hold). While there may still be better buying opportunities ahead, longer-term investors could certainly be rewarded with the Average Zacks Price Target of $275.43 a share suggesting 48% upside from current levels.

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