First Solar analysis

First Solar posted pretty optimistic guidance for F2015/16 at the analyst coverage day conference this morning and the stock is up 12% ATM.

Management seems to have done a good job implementing business strategy but one comment from the CEO that concerned me was that (preamble - primary market is the US) they don’t have any intention of pursuing the development of any rooftop solar modules, which are expected to vastly outpace traditional solar module facilities, their current business model. Instead, they are focusing on penetrating foreign markets.

Definitely have some competetive advantage in module efficiency with economies of scale on manufacturing and installation; but would have liked to see them be a little more open to diversifying their business a bit to hitch onto the subsector with the highest growth expectation.

Also - the stock dropped 8% the day they released Q4 2013 performance because of delayed revenue recognition on the production of a massive solar facility ($400m approx). The stock regained 7% or so the following day.

Do investors get that caught up in the timing of rev rec? They’re using the completed contract method (although at this point not sure why, should be able to reliably measure costs and use %completion). The $400m is just going to sit in the pipeline through Q1 and possible Q2, at which time they’ll have a massive beat on normalized earnings guidance. There isn’t really any change in cash flows from that event occurring, it’s just a miss from earnings on paper.

I can’t really think of why anyone would react that sharply to such a small accounting item.

Thoughts?

 

I would agree with Gov Sachs - I would rather buy a natural gas company, or an oil company with substantial nat gas exposure.

Solar is compelling, but it is really hard to pick a winner in the space. There are a lot of Chinese competitors that are benefiting from tremendous gov. spending. Also not sure how long Swanson's law will hold. All in all, it is a bit speculative yet.

 

Dignissimos cupiditate sunt deleniti quo repudiandae. Velit quisquam quas optio inventore.

You killed the Greece spread goes up, spread goes down, from Wall Street they all play like a freak, Goldman Sachs 'o beat.

Career Advancement Opportunities

March 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. (++) 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

March 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

March 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

March 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (86) $261
  • 3rd+ Year Analyst (13) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (202) $159
  • Intern/Summer Analyst (144) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
BankonBanking's picture
BankonBanking
99.0
3
Betsy Massar's picture
Betsy Massar
99.0
4
Secyh62's picture
Secyh62
99.0
5
GameTheory's picture
GameTheory
98.9
6
dosk17's picture
dosk17
98.9
7
DrApeman's picture
DrApeman
98.9
8
CompBanker's picture
CompBanker
98.9
9
kanon's picture
kanon
98.9
10
numi's picture
numi
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”