First Solar (FSLR), which some have called the Google of solar, jumped more than 40 percent this week on the power of its third quarter earnings. The company nearly quadrupled its revenue to $159 million and, more importantly, raised its outlook for fiscal year 2007 revenue to a range of $480 million to $485 million from a previous outlook of $400 million $415 million. The company gave a 2008 revenue outlook of $760 million to $800 million.
Several analysts upgraded the stock. Some bloggers, on the other hand, were a bit more skeptical. Paul Kedrosky questioned the longevity of the company’s cadmium telluride solar cells. On Seeking Alpha Prashanth Cherukuri raised the inevitable valuation questions that should dog a company with a P/E ratio of 220.
Despite the big net jump this week, shares of the company dropped almost 8 percent in Friday’s tough trading, most likely on profit taking by investors who rode the stock up 34 percent on Thursday. Given the competition that comes with hundreds of millions of dollars of VC money going into thin-film tech, First Solar would benefit from a ratcheting down of expectations.
Still, investors can count on at least one big lever for the company: the U.S. market. This week in San Francisco, First Solar’s CFO told a packed room at a Pacific Growth Equities conference that the company was still working on its U.S. market entry strategy, but that they had a plan to provide electricity at prices competitive with traditional technologies within five years.