Shares of First Solar, Inc. (NASDAQ:FSLR) — the largest U.S.-based solar manufacturer — have risen as much as 21% since I last recommended the stock. The 31% returns First Solar has delivered over the past month have caused some investors to believe that FSLR stock has gotten overheated. But it would be a mistake to part with this winner now.

After flaming out in 2016, losing some 51% of its value, there’s still lots to love about FSLR stock, which is still down some 24% from its 52-week high of $51.30.

The company, which has begun to cuts costs, has followed the erratic movements of solar stocks, in general.

Considering that solar leaders such as SunPower Corporation (NASDAQ:SPWR) and Solarcity — owned by Tesla Inc (NASDAQ:TSLA) have all exceeded Wall Street’s earnings estimates, the industry might have finally turned the corner.

Reasons to Bet on FSLR Stock

What’s more, it’s encouraging that there’s the possibility that President Trump, a strong coal supporter, could impose new tariffs on Chinese panel imports. Indeed, imposing tariffs would a double edged sword. While it would potentially make solar installations more expensive, the restrictions could also boost solar names like FSLR stock from the standpoint that the higher prices would be higher margins, too.

It’s likely for this reason short sellers have begun to close out their positions on solar stocks. As of the most recent settlement period, First Solar saw short interest fall almost 22% to 15.56 million shares. Not only has the short float fallen from 25% to 20% during that span, the days to cover have also fallen from six to three.

With a 70% decline in first-quarter gross profit, FSLR has struggled with with profitability, which tagged its gross profit on sales down from 31.7% to 9.4%. And management would love to move beyond prolonged declining prices in solar installations.

The company’s module sales declined by $179 million in Q1, even though FSLR reported a 2% rise in revenues to $892 million. Considering the prospects for residential solar (the main driver of revenues for the industry) remain tepid at best, First Solar guided confidently. Even with the upbeat guidance, the metrics were still low enough that FSLR should have no problem exceeding.

The company expects fiscal 2017 per-share earnings of 25 cents to 75 cents, compared to its prior forecast of flat to 50 cents per share and above Street estimates of 29 cents.

It sees revenues coming in the range of $2.85 billion to $2.95 billion, up from previous guidance of $2.8 billion to $2.9 billion and higher than the $2.79 billion Wall Street was looking for.

Bottom Line for FSLR Stock

What’s more, FSLR sees demand for 3 Gigawatts of solar capacity to pick up in Q2 and is working on the development of its Series 6 module, where it is diverting cash to help deliver ahead of schedule.

The push toward Series 6 important because the Series 6 offers significantly lower capex than Series 4, which will help FSLR accelerate profitability.

At some point, solar energy, which continues to gain global acceptance as it decreases in costs, can’t be avoided any longer. And this is where First Solar’s restructuring efforts, including plans to cut about 27% of its workforce, makes sense.

Assuming it can execute on cost cuts, while accelerating its Series 6 solar modules, FSLR stock could rebound above $50 by the end of the year.

As of this writing, Richard Saintvilus did not hold a position in any of the aforementioned securities.