QS Research · Michael Burry's Scion Capital analyst template · 2006
FIRST SOLAR, INC. (FSLR)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -42% · downside -48% · upside +10%
The call is a short because section 13's cycle base is FY2020-FY2025 normalized EBITDA of $1.1246B, and even a 10.0x multiple — above CSIQ's 8.9x and far below NXT's 18.2x — gives $11.25B EV + $1.58B cash - $0.1077B debt - $0.1809B leases = $12.54B equity, -42.0% versus the $21.62B market cap (S1, S2, N19, N20, N21, N23). The market is capitalizing TTM EBITDA of $2.48B and TTM EBIT of $1.89B at 8.1x/10.7x (N25, N26), but TTM FCF is only $232.8M (N18) and FY2026 guidance embeds $2.07-2.19B of Section 45X credits (S95), so the apparent cheapness is on subsidized peak earnings, not normalized cash flow. Downside at CSIQ's 8.9x normalized EBITDA is -47.7% and upside at 20.0x is only +10.0%, so the short rule is met (base <= -30%, upside <= +25%). I keep medium conviction because the $500M buyback, $1.5B net cash and 10.8% short interest can squeeze a leveraged short, and the FY2020-FY2025 average may understate the larger post-2025 footprint.
Key numbers
- Share price: $201.14
- Market cap: $21.62B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $5.01B
- EV / EBITDA (TTM): 8.1x
- P/E (TTM): 11.6x
- Price / book: 1.99x
The 15 boxes
- ✓ 1. Long-form business notes
First Solar designs, makes and sells CdTe thin-film solar modules — not silicon, not Chinese supply chain — in a continuous glass-in/module-out process, with 96% of FY2025 net sales in the United States and revenue of $5.22B versus $2.71B in FY2020. The business shrank its scope and then re-grew: the FY2020 10-K still described project development and O&M businesses that were put up for sale in 2020-2021, while the FY2025 10-K is a pure module-manufacturing story with a Series 7 ramp across Ohio, India, Alabama and Louisiana. The cycle is visible in the numbers — FY2022 gross profit collapsed to $69.9M with a $27.2M operating loss on $2.62B of revenue, then FY2025 produced $2.12B gross profit and $1.60B operating income. Earnings are heavily tied to U.S. policy (IRA Section 45X manufacturing credits as amended by the OBBBA in July 2025), so operating results should be read alongside that subsidy, not instead of it.
- ✓ 2. Competitive advantage
FSLR's stated edge is technology differentiation — thin-film CdTe modules, integrated manufacturing and a tightly controlled supply chain that avoids polysilicon — plus an ability to navigate U.S./India content rules, not a demonstrated cost moat. Management itself says the principal method of competition is sales price per watt and its primary competitors are China-linked crystalline silicon makers, some with sovereign capital able to run at minimal or negative margins. The margin record is cyclical rather than durably high: gross profit fell from $730.0M (FY2021) to $69.9M (FY2022) on a revenue decline of only $0.30B, and operating income was -$27.2M that year, before recovering to $1.60B in FY2025. Capex over FY2020-FY2025 ($5.65B) exceeded operating cash flow ($5.03B), so the advantage has been paid for with heavy, continuous reinvestment.
- ✓ 3. 10-Q takeaways
Q3 2026 net sales fell 22.8% to $1.2 billion on lower third-party module volume and lower revenue from customer contract terminations, but gross margin rose to 57.9% from 38.3% on more Section 45X-qualifying volume and higher price per watt. Operating income was 44.4% of net sales; net income was 46.4% of net sales and included a 0.4% income tax benefit. Backlog was 44.0 GW/$13.5 billion at 9/30/26, while tariff refunds and OBBBA/FEOC/trade risks are the main moving parts.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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