First Solar On 'Visible Path To Growth': Needham

First Solar, Inc. FSLR is the world’s only commercial manufacturer of thin-film CdTe solar modules, with a share of around 4% in a market that has expanded from 17 gigawatts per year in 2010 to 139 gigawatts per year in 2020, and is expected to grow to 240 gigawatts per year by 2023, according to Needham.

The First Solar Analyst: Vikram Bagri initiated coverage of First Solar with a Hold rating.

The First Solar Takeaways: The company could double its manufacturing capacity to 16 gigawatts per year in three years and launch next-gen modules developed in-house, Bagri said in an initiation note.

First Solar is uniquely positioned in the market, and the increase of around 9 gigawatts to its backlog in the first seven months of 2021 “puts it on a visible path to strong growth,” the analyst said. 

“The company's series 6 module has lowered its costs meaningfully and the new series 7 module (500W) will further reduce its cost/watt, expand its gross margin by 1-3¢, and provide FSLR with a cost advantage over Asian manufacturers,” he said. 

“However, in the interim, we expect the margins to narrow due to higher freight costs and a projected 11% degradation in ASP next year.” 

FSLR Price Action: Shares of First Solar were trading 3.26% higher at $102.11 Friday morning.