It has taken a while, but First Solar (NASDAQ:FSLR) stock is a bright spot in portfolios once again.
The solar power company has been bouncing up and down for the last several years. Low oil prices made it less urgent to build out the infrastructure necessary to support alternative energy.
First Solar stock dipped and waned. It never found long-term momentum, and sometimes it dipped all the way into the $30 range.
But finally, all that seems to be changing for First Solar, which is the largest manufacturer of solar systems and solar panels in the U.S.
After sliding in March along with the rest of the market, FSLR stock is showing newfound strength. In October it finally managed to clear the $80 hurdle and now is trading closer to $85.
That gives investors a cool 49% profit so far in 2020. Not bad at all.
And there is optimism that First Solar will manage to not only hold on to those gains, but to build on them. The alternative energy company has a legacy automaker to thank for some newly bullish sentiment in FSLR stock.
A Partnership with General Motors
GM signed a 180-megawatt power-purchase agreement with First Solar. The deal is part of GM’s plan to source 100% of its U.S. facilities with renewable energy by 2030. GM Chief Sustainability Officer Dane Parker says:
“As GM continues its transition to an all-electric, zero-emissions future, it is imperative that we also invest in a cleaner grid that can support everything — from our factories to our vehicles. Investments like these have increased access to renewable power, and with this deal we are exploring the next frontier of renewable energy, which integrate the principles of circularity and energy storage, among others.”
First Solar says it will supply power through its facility in Tempe, Arizona.
Renewable Energy Is the Future
There has been a huge debate over energy dependences in recent years. President Donald Trump is pushing fossil fuel production. He dismisses climate change and global warming concerns and even announced the U.S. will withdraw from the Paris Agreement on climate change.
With that background, it is no wonder that alternative energy stocks have taken a back seat. But even so, there is growing interest in finding clean energy solutions.
According to Forbes, solar energy is expected to be the fastest-growing source of renewable energy in the U.S. between now and 2050.
Considering that solar energy accounted for only 1.5% of U.S. electricity in 2018, the opportunity is tremendous for FSLR stock. And should former Vice President Joe Biden take the Oval Office in January, he will put greater emphasis on renewable energy solutions.
FSLR Stock Earnings
First Solar is scheduled to report third-quarter earnings on Oct. 27. Analysts are projecting FSLR will post revenue of $693 million and earnings of 61 cents per share. A year ago, First Solar earned 29 cents per share.
This would be the third consecutive earnings beat for First Solar. The company blew expectations out of the water in the first quarter, beating estimates by more than 200%. In the second quarter, earnings of 35 cents per share beat analysts’ expectations by 25%.
The Bottom Line
First Solar is a long way from its days of trading near $300.
But with the probability that the White House will change hands after Election Day, coupled with the reality that companies like GM are committed to reducing their carbon footprint, there’s a bright future for solar stocks.
First Solar is the biggest solar manufacturer in the U.S., and that’s a good place for investors to be. If the company continues its recent trend of exceeding earnings expectations, FSLR stock will soar even closer to the sun.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.