Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, solar module maker First Solar
With that in mind, let's take a closer look at First Solar's business and see what CAPS investors are saying about the stock right now.
First Solar facts
| Headquarters (Founded) | Tempe, Ariz. (1999) |
| Market Cap | $14.25 billion |
| Industry | Specialized Semiconductors |
| Trailing-12-Month Revenue | $2.59 billion |
| Management |
CEO Robert Gillette (since 2009) CFO James Zhu (since 2011) |
| Return on Equity (Average Past 3 Years) | 26.3% |
| Cash/Debt | $833.4 million / $252.4 million |
| 6-Month Return | 33% |
| Competitors |
Suntech Power
SunPower
Yingli Energy |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 19% of the 3,768 members who have rated First Solar believe the stock will underperform the S&P 500 going forward. These bears include JackCaps and All-Star boxxer55, who is ranked in the top 6% of our community.
Just last month, JackCaps touched on the stock's dim prospects:
Most of First Solar's revenues are dependent directly or indirectly on government mandates of some type and not free market incentives. The reason for this is that solar generated electricity has negative attributes, namely high cost and inconsistent output, that prevent it from being commercially viable on a large scale.
Currently, First Solar trades at a pricey forward P/E of 18.3. That represents a clear premium to rivals Suntech (7.9), SunPower (8.9), and Yingli (8.8), as well as other solar stocks like ReneSola
CAPS member boxxer55 elaborates on the bear case:
Governments across the globe are being forced to cut back spending to balance their books. Countries like Germany and Spain are cutting the incentives necessary to make expansion of solar profitable. Over capacity will compound the impact of reduced demand by compressing margins creating a 1-2 punch to the industry in 2011 and beyond.
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