First Solar’s stock price has taken a beating over the past six months, shedding 45.1% of its value and falling to $131.85 per share. This was partly driven by its softer quarterly results and might have investors contemplating their next move.

Following the drawdown, is this a buying opportunity for FSLR? Find out in our full research report, it’s free.

Why Is First Solar a Good Business?

Headquartered in Arizona, First Solar (NASDAQ:FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.

1. Skyrocketing Revenue Shows Strong Momentum

We at StockStory place the most emphasis on long-term growth, but within industrials, a stretched historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. First Solar’s annualized revenue growth of 26.7% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

First Solar’s full-year EPS flipped from negative to positive over the last five years. This is a good sign and shows it’s at an inflection point.

3. Increasing Free Cash Flow Margin Juices Financials

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, First Solar’s margin expanded by 6.7 percentage points over the last five years. First Solar’s free cash flow margin for the trailing 12 months was negative 7.3%, and continued increases could help it achieve long-term cash profitability.

Final Judgment

These are just a few reasons why First Solar is one of the best industrials companies out there. After the recent drawdown, the stock trades at 6.3× forward price-to-earnings (or $131.85 per share). Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

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