Intrinsic value of First Solar - FSLR

Previous Close

$70.03

  Intrinsic Value

$12.30

stock screener

  Rating & Target

str. sell

-82%

Previous close

$70.03

 
Intrinsic value

$12.30

 
Up/down potential

-82%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of FSLR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -17.55
  59.60
  54.14
  49.23
  44.80
  40.82
  37.24
  34.02
  31.12
  28.50
  26.15
  24.04
  22.13
  20.42
  18.88
  17.49
  16.24
  15.12
  14.11
  13.20
  12.38
  11.64
  10.97
  10.38
  9.84
  9.36
  8.92
  8.53
  8.17
  7.86
  7.57
Revenue, $m
  2,951
  4,710
  7,260
  10,833
  15,687
  22,091
  30,318
  40,631
  53,273
  68,458
  86,362
  107,121
  130,832
  157,548
  187,291
  220,050
  255,790
  294,459
  335,994
  380,329
  427,397
  477,138
  529,501
  584,446
  641,951
  702,007
  764,624
  829,829
  897,668
  968,202
  1,041,511
Variable operating expenses, $m
 
  4,031
  6,212
  9,270
  13,422
  18,901
  25,939
  34,762
  45,578
  58,569
  73,886
  91,645
  111,930
  134,787
  160,232
  188,258
  218,835
  251,917
  287,452
  325,381
  365,649
  408,204
  453,001
  500,009
  549,205
  600,585
  654,155
  709,940
  767,978
  828,321
  891,040
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,454
  4,031
  6,212
  9,270
  13,422
  18,901
  25,939
  34,762
  45,578
  58,569
  73,886
  91,645
  111,930
  134,787
  160,232
  188,258
  218,835
  251,917
  287,452
  325,381
  365,649
  408,204
  453,001
  500,009
  549,205
  600,585
  654,155
  709,940
  767,978
  828,321
  891,040
Operating income, $m
  -503
  679
  1,047
  1,564
  2,265
  3,190
  4,379
  5,869
  7,695
  9,889
  12,476
  15,476
  18,902
  22,762
  27,059
  31,792
  36,955
  42,542
  48,543
  54,948
  61,748
  68,934
  76,499
  84,438
  92,745
  101,422
  110,469
  119,889
  129,690
  139,880
  150,472
EBITDA, $m
  -503
  892
  1,376
  2,053
  2,972
  4,186
  5,744
  7,699
  10,094
  12,971
  16,363
  20,297
  24,789
  29,851
  35,487
  41,694
  48,466
  55,792
  63,662
  72,063
  80,981
  90,405
  100,327
  110,738
  121,633
  133,012
  144,877
  157,231
  170,085
  183,449
  197,340
Interest expense (income), $m
  0
  6
  39
  86
  153
  244
  364
  518
  711
  947
  1,231
  1,566
  1,955
  2,399
  2,899
  3,455
  4,068
  4,737
  5,461
  6,238
  7,067
  7,948
  8,879
  9,859
  10,887
  11,963
  13,087
  14,259
  15,479
  16,748
  18,068
Earnings before tax, $m
  -472
  673
  1,009
  1,478
  2,112
  2,946
  4,015
  5,351
  6,985
  8,942
  11,244
  13,910
  16,947
  20,363
  24,160
  28,336
  32,887
  37,805
  43,082
  48,710
  54,681
  60,986
  67,620
  74,579
  81,858
  89,459
  97,382
  105,630
  114,211
  123,132
  132,404
Tax expense, $m
  58
  182
  272
  399
  570
  795
  1,084
  1,445
  1,886
  2,414
  3,036
  3,756
  4,576
  5,498
  6,523
  7,651
  8,879
  10,207
  11,632
  13,152
  14,764
  16,466
  18,257
  20,136
  22,102
  24,154
  26,293
  28,520
  30,837
  33,246
  35,749
Net income, $m
  -358
  492
  737
  1,079
  1,542
  2,151
  2,931
  3,906
  5,099
  6,527
  8,208
  10,154
  12,371
  14,865
  17,637
  20,686
  24,007
  27,598
  31,450
  35,558
  39,917
  44,520
  49,363
  54,442
  59,757
  65,305
  71,089
  77,110
  83,374
  89,886
  96,655

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,955
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,824
  7,772
  11,980
  17,877
  25,886
  36,454
  50,029
  67,048
  87,910
  112,967
  142,511
  176,768
  215,894
  259,981
  309,062
  363,119
  422,095
  485,905
  554,446
  627,606
  705,276
  787,357
  873,764
  964,433
  1,059,325
  1,158,427
  1,261,756
  1,369,355
  1,481,300
  1,597,692
  1,718,665
Adjusted assets (=assets-cash), $m
  4,869
  7,772
  11,980
  17,877
  25,886
  36,454
  50,029
  67,048
  87,910
  112,967
  142,511
  176,768
  215,894
  259,981
  309,062
  363,119
  422,095
  485,905
  554,446
  627,606
  705,276
  787,357
  873,764
  964,433
  1,059,325
  1,158,427
  1,261,756
  1,369,355
  1,481,300
  1,597,692
  1,718,665
Revenue / Adjusted assets
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
  0.606
Average production assets, $m
  1,327
  2,119
  3,267
  4,875
  7,059
  9,941
  13,643
  18,284
  23,973
  30,806
  38,863
  48,205
  58,874
  70,897
  84,281
  99,022
  115,105
  132,506
  151,197
  171,148
  192,329
  214,712
  238,275
  263,001
  288,878
  315,903
  344,081
  373,423
  403,950
  435,691
  468,680
Working capital, $m
  2,880
  1,521
  2,345
  3,499
  5,067
  7,135
  9,793
  13,124
  17,207
  22,112
  27,895
  34,600
  42,259
  50,888
  60,495
  71,076
  82,620
  95,110
  108,526
  122,846
  138,049
  154,116
  171,029
  188,776
  207,350
  226,748
  246,974
  268,035
  289,947
  312,729
  336,408
Total debt, $m
  188
  1,100
  2,463
  4,374
  6,969
  10,393
  14,792
  20,305
  27,065
  35,183
  44,756
  55,855
  68,532
  82,816
  98,718
  116,232
  135,341
  156,015
  178,222
  201,926
  227,091
  253,686
  281,681
  311,058
  341,803
  373,912
  407,391
  442,253
  478,523
  516,234
  555,430
Total liabilities, $m
  1,606
  2,518
  3,881
  5,792
  8,387
  11,811
  16,210
  21,723
  28,483
  36,601
  46,174
  57,273
  69,950
  84,234
  100,136
  117,650
  136,759
  157,433
  179,640
  203,344
  228,509
  255,104
  283,099
  312,476
  343,221
  375,330
  408,809
  443,671
  479,941
  517,652
  556,848
Total equity, $m
  5,218
  5,254
  8,098
  12,085
  17,499
  24,643
  33,820
  45,324
  59,427
  76,366
  96,338
  119,495
  145,944
  175,747
  208,926
  245,468
  285,336
  328,472
  374,805
  424,262
  476,767
  532,253
  590,664
  651,957
  716,104
  783,097
  852,947
  925,684
  1,001,359
  1,080,040
  1,161,818
Total liabilities and equity, $m
  6,824
  7,772
  11,979
  17,877
  25,886
  36,454
  50,030
  67,047
  87,910
  112,967
  142,512
  176,768
  215,894
  259,981
  309,062
  363,118
  422,095
  485,905
  554,445
  627,606
  705,276
  787,357
  873,763
  964,433
  1,059,325
  1,158,427
  1,261,756
  1,369,355
  1,481,300
  1,597,692
  1,718,666
Debt-to-equity ratio
  0.036
  0.210
  0.300
  0.360
  0.400
  0.420
  0.440
  0.450
  0.460
  0.460
  0.460
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
Adjusted equity ratio
  0.670
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -358
  492
  737
  1,079
  1,542
  2,151
  2,931
  3,906
  5,099
  6,527
  8,208
  10,154
  12,371
  14,865
  17,637
  20,686
  24,007
  27,598
  31,450
  35,558
  39,917
  44,520
  49,363
  54,442
  59,757
  65,305
  71,089
  77,110
  83,374
  89,886
  96,655
Depreciation, amort., depletion, $m
  0
  213
  328
  489
  707
  995
  1,366
  1,830
  2,399
  3,082
  3,888
  4,820
  5,887
  7,090
  8,428
  9,902
  11,511
  13,251
  15,120
  17,115
  19,233
  21,471
  23,828
  26,300
  28,888
  31,590
  34,408
  37,342
  40,395
  43,569
  46,868
Funds from operations, $m
  473
  705
  1,065
  1,567
  2,249
  3,146
  4,297
  5,736
  7,497
  9,609
  12,096
  14,975
  18,259
  21,955
  26,065
  30,588
  35,518
  40,848
  46,570
  52,673
  59,150
  65,991
  73,190
  80,743
  88,644
  96,895
  105,497
  114,453
  123,769
  133,455
  143,523
Change in working capital, $m
  266
  568
  824
  1,154
  1,568
  2,068
  2,657
  3,331
  4,083
  4,905
  5,783
  6,705
  7,658
  8,629
  9,607
  10,581
  11,544
  12,490
  13,416
  14,320
  15,203
  16,066
  16,913
  17,747
  18,574
  19,398
  20,225
  21,061
  21,912
  22,782
  23,679
Cash from operations, $m
  207
  137
  241
  413
  681
  1,078
  1,639
  2,405
  3,414
  4,705
  6,313
  8,269
  10,600
  13,325
  16,458
  20,007
  23,974
  28,358
  33,154
  38,353
  43,947
  49,925
  56,277
  62,995
  70,070
  77,497
  85,271
  93,391
  101,857
  110,673
  119,844
Maintenance CAPEX, $m
  0
  -133
  -212
  -327
  -487
  -706
  -994
  -1,364
  -1,828
  -2,397
  -3,081
  -3,886
  -4,820
  -5,887
  -7,090
  -8,428
  -9,902
  -11,511
  -13,251
  -15,120
  -17,115
  -19,233
  -21,471
  -23,828
  -26,300
  -28,888
  -31,590
  -34,408
  -37,342
  -40,395
  -43,569
New CAPEX, $m
  -229
  -793
  -1,147
  -1,608
  -2,184
  -2,882
  -3,702
  -4,641
  -5,689
  -6,833
  -8,057
  -9,342
  -10,670
  -12,023
  -13,384
  -14,741
  -16,083
  -17,401
  -18,691
  -19,951
  -21,181
  -22,383
  -23,563
  -24,725
  -25,877
  -27,025
  -28,178
  -29,342
  -30,527
  -31,740
  -32,989
Cash from investing activities, $m
  145
  -926
  -1,359
  -1,935
  -2,671
  -3,588
  -4,696
  -6,005
  -7,517
  -9,230
  -11,138
  -13,228
  -15,490
  -17,910
  -20,474
  -23,169
  -25,985
  -28,912
  -31,942
  -35,071
  -38,296
  -41,616
  -45,034
  -48,553
  -52,177
  -55,913
  -59,768
  -63,750
  -67,869
  -72,135
  -76,558
Free cash flow, $m
  352
  -789
  -1,118
  -1,522
  -1,990
  -2,510
  -3,057
  -3,600
  -4,103
  -4,526
  -4,824
  -4,959
  -4,890
  -4,585
  -4,016
  -3,163
  -2,011
  -554
  1,212
  3,282
  5,651
  8,308
  11,243
  14,442
  17,893
  21,584
  25,503
  29,641
  33,988
  38,538
  43,285
Issuance/(repayment) of debt, $m
  -116
  940
  1,363
  1,911
  2,595
  3,424
  4,399
  5,514
  6,759
  8,119
  9,572
  11,099
  12,677
  14,284
  15,902
  17,515
  19,108
  20,675
  22,207
  23,704
  25,165
  26,594
  27,996
  29,377
  30,745
  32,109
  33,478
  34,862
  36,270
  37,711
  39,195
Issuance/(repurchase) of shares, $m
  0
  1,471
  2,108
  2,908
  3,873
  4,993
  6,246
  7,598
  9,004
  10,411
  11,764
  13,003
  14,078
  14,938
  15,542
  15,857
  15,861
  15,538
  14,884
  13,898
  12,588
  10,967
  9,048
  6,850
  4,390
  1,688
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -136
  2,411
  3,471
  4,819
  6,468
  8,417
  10,645
  13,112
  15,763
  18,530
  21,336
  24,102
  26,755
  29,222
  31,444
  33,372
  34,969
  36,213
  37,091
  37,602
  37,753
  37,561
  37,044
  36,227
  35,135
  33,797
  33,478
  34,862
  36,270
  37,711
  39,195
Total cash flow (excl. dividends), $m
  209
  1,623
  2,353
  3,297
  4,477
  5,907
  7,588
  9,512
  11,660
  14,004
  16,512
  19,144
  21,865
  24,637
  27,428
  30,209
  32,958
  35,659
  38,303
  40,884
  43,405
  45,869
  48,287
  50,669
  53,029
  55,382
  58,982
  64,503
  70,258
  76,249
  82,480
Retained Cash Flow (-), $m
  330
  -1,963
  -2,844
  -3,986
  -5,414
  -7,144
  -9,177
  -11,504
  -14,103
  -16,939
  -19,972
  -23,157
  -26,449
  -29,803
  -33,179
  -36,543
  -39,868
  -43,136
  -46,333
  -49,456
  -52,505
  -55,487
  -58,411
  -61,292
  -64,147
  -66,993
  -69,850
  -72,737
  -75,674
  -78,682
  -81,778
Prev. year cash balance distribution, $m
 
  1,927
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,587
  -492
  -690
  -937
  -1,237
  -1,589
  -1,993
  -2,443
  -2,935
  -3,460
  -4,014
  -4,584
  -5,166
  -5,751
  -6,334
  -6,910
  -7,477
  -8,031
  -8,572
  -9,100
  -9,617
  -10,124
  -10,624
  -11,118
  -11,612
  -10,868
  -8,234
  -5,417
  -2,433
  703
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  1,521
  -450
  -600
  -772
  -959
  -1,153
  -1,346
  -1,527
  -1,686
  -1,814
  -1,906
  -1,956
  -1,964
  -1,931
  -1,859
  -1,756
  -1,627
  -1,479
  -1,320
  -1,156
  -995
  -840
  -696
  -566
  -452
  -317
  -177
  -84
  -27
  5
Current shareholders' claim on cash, %
  100
  76.0
  59.3
  47.3
  38.6
  32.1
  27.3
  23.5
  20.7
  18.4
  16.6
  15.1
  14.0
  13.0
  12.3
  11.7
  11.1
  10.7
  10.4
  10.1
  9.9
  9.8
  9.7
  9.6
  9.5
  9.5
  9.5
  9.5
  9.5
  9.5
  9.5

First Solar, Inc. is a provider of photovoltaic (PV) solar energy solutions. The Company designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. The Company also develops, designs, constructs and sells PV solar power systems that primarily use the modules it manufactures. It operates through two segments: components and systems. The components segment is engaged in the design, manufacture and sale of cadmium telluride (CdTe) solar modules, which convert sunlight into electricity. The systems segment includes the development, construction, operation and maintenance of PV solar power systems, which primarily use its solar modules. In addition, the Company provides operations and maintenance (O&M) services to system owners that use solar modules manufactured by it or by third-party manufacturers. The Company's solar modules had an average rated power per module of approximately 114 watts, as of December 31, 2016.

FINANCIAL RATIOS  of  First Solar (FSLR)

Valuation Ratios
P/E Ratio -20.3
Price to Sales 2.5
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 35.2
Price to Free Cash Flow -331.1
Growth Rates
Sales Growth Rate -17.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 38%
Cap. Spend. - 3 Yr. Gr. Rate -4.1%
Financial Strength
Quick Ratio 70
Current Ratio 1
LT Debt to Equity 3.1%
Total Debt to Equity 3.6%
Interest Coverage 0
Management Effectiveness
Return On Assets -5.1%
Ret/ On Assets - 3 Yr. Avg. 2.8%
Return On Total Capital -6.4%
Ret/ On T. Cap. - 3 Yr. Avg. 3.8%
Return On Equity -6.7%
Return On Equity - 3 Yr. Avg. 4%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 23.9%
Gross Margin - 3 Yr. Avg. 24.6%
EBITDA Margin -16%
EBITDA Margin - 3 Yr. Avg. 3.8%
Operating Margin -17%
Oper. Margin - 3 Yr. Avg. 3.3%
Pre-Tax Margin -16%
Pre-Tax Margin - 3 Yr. Avg. 3.8%
Net Profit Margin -12.1%
Net Profit Margin - 3 Yr. Avg. 4.9%
Effective Tax Rate -12.3%
Eff/ Tax Rate - 3 Yr. Avg. -2.1%
Payout Ratio 0%

FSLR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FSLR stock intrinsic value calculation we used $2951 million for the last fiscal year's total revenue generated by First Solar. The default revenue input number comes from 2016 income statement of First Solar. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our FSLR stock valuation model: a) initial revenue growth rate of 59.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for FSLR is calculated based on our internal credit rating of First Solar, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of First Solar.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of FSLR stock the variable cost ratio is equal to 85.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for FSLR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for First Solar.

Corporate tax rate of 27% is the nominal tax rate for First Solar. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the FSLR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for FSLR are equal to 45%.

Life of production assets of 10 years is the average useful life of capital assets used in First Solar operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for FSLR is equal to 32.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5218 million for First Solar - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 105.746 million for First Solar is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of First Solar at the current share price and the inputted number of shares is $7.4 billion.

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COMPANY NEWS

▶ Dan Passarelli's First Solar Options Strategy   [Jan-12-18 03:54PM  Bloomberg Video]
▶ Top 3 Solar Stocks as of January 2018   [Jan-11-18 05:15PM  Investopedia]
▶ First Solar Jumps As Coverage Initiated With Buy Rating   [04:11PM  Investor's Business Daily]
▶ How to Trade First Solar Stock as It Heats Up   [Jan-10-18 09:30AM  InvestorPlace]
▶ First Solar to Provide Power Electronics Warranty Services   [Jan-09-18 03:05PM  Business Wire]
▶ 3 Top Green Stocks to Consider Buying Now   [01:32PM  Motley Fool]
▶ Why First Solar Stock Doubled in 2017   [Jan-06-18 10:31AM  Motley Fool]
▶ These 4 S&P 500 Stocks Doubled in 2017   [Jan-02-18 08:13AM  Motley Fool]
▶ ETFs with exposure to First Solar, Inc. : January 1, 2018   [Jan-01-18 11:37AM  Capital Cube]
▶ The 3 Best Solar Stocks of 2017   [Dec-29-17 08:00PM  Motley Fool]
▶ Short Interest Trending Lower in Solar, Alt Energy Stocks   [Dec-28-17 07:40AM  24/7 Wall St.]
▶ Tariffs Could Throw Solar Stocks For a Loop   [Dec-21-17 10:32AM  Motley Fool]
▶ 5 Top Alternative Energy Stocks to Consider Buying Now   [Dec-20-17 07:35PM  Motley Fool]
▶ 3 Solar Stocks to Buy for 2018   [08:05AM  Motley Fool]
▶ Renewable Energy Stocks Recover From Tax Bill Mishap   [Dec-18-17 09:50AM  Investopedia]
▶ First Solar: Can Thin-Film Keep Up?   [11:14AM  Motley Fool]
▶ 10 Biggest Stock Market Successes of 2017   [02:28PM  InvestorPlace]
▶ 5 Energy Dividend Stocks You Can Buy Right Now   [Dec-11-17 08:45PM  Motley Fool]
▶ Stocks Close Higher As Verizon Rallies On NFL Deal   [04:20PM  Investor's Business Daily]
▶ First Solar Gets Top Rating With Industry At Inflection Point   [04:20PM  Investor's Business Daily]
▶ Why First Solar's Shrinking Profit Margins Could Rebound   [Dec-08-17 07:06PM  Motley Fool]
▶ First Solar Stock Showing Unusual Strength   [Dec-06-17 09:35AM  Investopedia]
▶ First Solar's Future Gets Brighter   [04:03PM  Barrons.com]
▶ First Solar Bets Its Future on a New Panel   [Dec-04-17 03:56PM  Bloomberg]
▶ 3 Stocks That Look Just Like Nike in 1980   [Dec-03-17 07:03AM  Motley Fool]
▶ First Solar Stock Could Still Have Room to Run   [Nov-30-17 08:22AM  Motley Fool]
▶ First Solar To Host Analyst Day on Tuesday, December 5th   [Nov-29-17 09:05AM  Business Wire]
▶ 3 Top Stocks in Solar Energy   [Nov-28-17 08:30AM  Motley Fool]
▶ 3 Low-Risk Options Trading Plays This Week   [10:51AM  InvestorPlace]
▶ Why First Solar's Stock Has Doubled This Year   [Nov-24-17 01:37PM  Forbes]
▶ Canadian Solar Beat Analysts 3Q17 Revenue Estimates   [Nov-21-17 02:35PM  Market Realist]
▶ First Solar, Inc. Stock Is on the Verge of a Breakout   [Nov-15-17 12:25PM  InvestorPlace]
Financial statements of FSLR
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