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What: Shares of solar manufacturer First Solar (NASDAQ:FSLR) are up 20% today after the company issued encouraging guidance.

So what: 2014 earnings guidance wasn't too great with an expected $2.20 to $2.60 per share compared to expectations of $3.12 in earnings per share from Wall Street. But earnings are expected to grow to $4.50 to $6.00 per share in 2015 and $3.50 to $5.00 per share in 2016. Analysts were guessing at $3.68 in earnings for 2016 and the increasing numbers may show that the company is expecting improved margins from its improved panels.

Now what: The reality is that First Solar wasn't able to hit earnings quarter to quarter in 2013, so I'm not sure what guidance three years out tells us about the company. Management is expecting to increase efficiency to 17% by 2017, which would be a big bump from 13.4% last year, but that may only keep up with increases made by other technologies.

I think investors are putting a lot of faith in guidance so far out that there's no way to know what the numbers will be. Projects have gotten smaller and lead times shorter, which will mean less visibility, converse to three-year guidance given today.

I don't think First Solar is in terrible shape, I'd just like to see improving numbers and the company even jettison module making altogether before jumping in.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.