Shares of First Solar plunged 17% Wednesday to their lowest level in three months after the company delivered disappointing fourth-quarter sales figures and a weak outlook for the first quarter.
First Solar (FSLR) reported revenue of $1.1 billion for the last three months of 2012, falling short of the $1.3 billion that analysts were expecting. For the first quarter, the solar panel maker expects to earn between 70 cents and 90 cents per share on revenue of $650 million to $750 million. Analysts were expecting the company to earn 89 cents per share on revenue of $867 million for the current quarter.
First Solar's intraday drop is the steepest since Aug. 30. Shares of fellow solar panel maker SunPower (SPWR) also declined sharply.
The downbeat results sparked Wall Street analysts to downgrade the stock and cut price targets. The company's results were also a hot topic among traders on StockTwits.
Even with that fascination, companies trying to capitalize on the power of the sun have struggled in recent years as competition heats up in China, where solar panels can be manufactured more cheaply.
Bank of America's Joe Osha also cut his price target to $25 per share from $35. That's nowhere near a resounding endorsement for a stock trading at just above $26. It's closer to its 52-week low than its 52-week high at this point.
"While the balance sheet is healthy, and the company has stayed profitable thanks to its legacy U.S. utility-scale projects, as those gradually roll off we envision progressively lower levels of profitability," said Molchanov in his note to clients. "We maintain our Underperform rating, a negative stance on par with the three other module makers we cover: SunPower, Suntech (STP), and Trina (TSL)."
That's a pretty cheap P/E but depends if you're willing to take a chance on a stock that has cooled off considerably over the past year.
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