Bear Of The Day: First Solar (FSLR)
First Solar (FSLR) is a Zacks Rank #5 (Strong Sell) after recently missing the Zacks Consensus Estimate. The stock has a Zacks Style Score for Value of C and an A for Growth. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
First Solar, Inc. is a solar technology company, which engages in the provision of solar modules. It is involved in the design, manufacture, and sale of cadmium tellurid (CdTe) solar modules, which convert sunlight into electricity. The company was founded by Michael J. Ahearn in 1999 and is headquartered in Phoenix, AZ.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of First Solar (FSLR) I see the company has beaten the Zacks Consensus Estimate in one of the last four quarters. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
The most recent earnings report from First Solar (FSLR) saw the company post $4.84 in EPS when the Zacks Consensus Estimate was calling for $5.22. That 38 cent miss translates to a -7.28% negative earnings surprise.
Earnings Estimate Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For First Solar (FSLR) I see annual estimates for next year moving lower of late.
The current fiscal year consensus number has slid from $23.36 to $18.57 over the last 60 days.
The next fiscal year has also dropped from $29.52 to $25.23 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
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First Solar, Inc. (FSLR): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Source Zacks-com
