Highlights

  • First Solar has 38.60% basic EPS growth, a P/E of 10.61 and PEG of 0.30.
  • Second quarter net income was $422,569 thousand, against $341,868 thousand.
  • Gross profit was 57.3% of net sales in the second quarter, against 45.6%.
  • First Solar prepaid the final $328.2 million of its India Credit Facility in May.

Basic earnings per share growth of 38.60% over one year, a trailing twelve-month P/E of 10.61 and a PEG of 0.30 on an expected basis define First Solar (NASDAQ:FSLR) as an undervalued growth stock, with shares trading at USD 174.19 on October 28, 2026, down 0.94%. Alongside those figures, the solar module manufacturer filed a USITC petition over TOPCon solar product imports on February 24, prepaid the final principal of its India Credit Facility in May, and reported second quarter 2026 net income of $422,569 thousand in its Form 10-Q filed July 30.

First Solar is based in Phoenix, Arizona, and incorporated in Delaware. It designs, manufactures and sells cadmium telluride (CdTe) thin film photovoltaic solar modules and operates as a single operating segment. Its customers include developers and operators of utility-scale systems, mainly in the United States and India. Its manufacturing footprint spans the United States, India, Malaysia and Vietnam, and it is building a sixth U.S. facility in South Carolina.

Growth: Second Quarter 2026 Earnings, Net Sales and Gross Profit

Net income was $422,569 thousand in the second quarter against $341,868 thousand a year earlier, and $769,188 thousand for the six months against $551,403 thousand. Basic earnings per share were $3.93 against $3.19, and diluted earnings per share were $3.92 against $3.18.

Net sales were $1,056,193 thousand against $1,097,170 thousand, down 3.7%, which the company attributed primarily to lower revenue from customer contract terminations, partly offset by a 5.3% increase in the volume of modules sold to third parties. Six-month net sales were $2,100,433 thousand against $1,941,738 thousand, up 8.2%.

Gross profit was $605,004 thousand against $499,850 thousand. The company tied the gross profit rate to an $88.6 million net benefit from expected IEEPA tariff refunds less estimated amounts payable to customers, a higher volume of modules qualifying for the Section 45X advanced manufacturing production credit, and lower logistics costs.

Valuation: P/E of 10.61, PEG of 0.30 and Contracted Sales

The P/E ratio of 10.61 is measured on trailing twelve-month earnings, and the PEG ratio of 0.30 on expected growth. Total stockholders' equity was $10,320,338 thousand at June 30, 2026, against $9,537,993 thousand at December 31, 2025. Net cash used in operating activities was $359,767 thousand for the six months against $458,405 thousand.

As of June 30, 2026, First Solar had contracts with customers for the future sale of 45.1 GW of modules for an aggregate transaction price of $13.6 billion, which it expects to recognize as revenue through 2030.

Capital and Balance Sheet: Cash, Debt and Capital Expenditures

Cash and cash equivalents were $1,688,279 thousand at June 30, 2026, against $2,803,514 thousand at December 31, 2025. Cash, cash equivalents and marketable securities were $1.7 billion against $2.9 billion, which the company tied primarily to supplier payments, working capital, U.S. facility purchases and debt repayment, partly offset by Section 45X receipts and IEEPA tariff refunds.

Total debt was $37,635 thousand against $498,572 thousand. In May 2026 the company prepaid the final $328.2 million of principal and $5.5 million of interest on the India Credit Facility. In February 2026 it entered a senior unsecured revolving Credit Facility with aggregate borrowing capacity of $1.5 billion, with no balance outstanding at June 30, 2026. The company expects 2026 capital expenditures of between $0.8 billion and $1.0 billion.

Disclosed Risks and Outlook for 2026

The company disclosed a dispute with BP Solar Holding and Lightsource Renewable Energy Trading over terminated master supply agreements. It states that termination payments amount to $384.6 million, of which it recognized $61.0 million in revenue, and it seeks the remaining $323.6 million. The defendants denied the claims and demanded $175 million plus the return of $15 million of credit support.

A securities class action was filed June 23, 2026, and a shareholder derivative suit on July 28, 2026; the company disputes the allegations and intends to defend the class action vigorously. It also carries a $21.8 million accrued litigation payable, matched by an insurance receivable. The company noted that tariff refunds it ultimately recovers may differ from amounts paid, that the difference may be material. Research and development expense was $76,243 thousand against $54,487 thousand, and the effective tax rate was 8.0% against 2.9%.

The company expects the first phase of its South Carolina facility, an investment of approximately $0.3 billion, to begin operations in the second half of 2026, and a perovskite pilot line to be available in 2027. In its TOPCon patent case, the USITC hearing is scheduled for February 16, 2027, with a preliminary ruling expected in May 2027 and a final ruling in September 2027.