Needham & Company Maintains a 'Hold' on First Solar (FSLR); Q1 Miss, Revenues Weak; 5-Year Plan Not That Appealing

May 4, 2012 8:16 AM EDT Send to a Friend
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Price: $56.10 -0.11%

Rating Summary:
    11 Buy, 21 Hold, 9 Sell

Rating Trend: Up Up

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Needham & Company maintains a 'Hold' on First Solar (NASDAQ: FSLR).

Analyst, Y. Edwin Mok, said, "FSLR reported its first non-GAAP losses since 2006 on weak 1Q12 revenue. While the company raised 2012 EPS guidance on better cost controls and reiterated full year revenue guidance, we are less confident on the back-end loaded target. We believe FSLR will completely exit 3rd party module business by 2013, resulting in lower than expected sales and earnings. As FSLR continues to shift its business to target the unsubsidized market, we find the lack of earnings growth implied by the 5-year plan unattractive. If the company achieves its goals, we acknowledge the stock may carry a higher valuation than today; however, we would expect such a transformation to be long and likely painful."

"We raise our 2012 non-GAAP EPS estimate to $4.02 (from $3.92) and 2013 to $2.88 (from $2.39), based on lowered OPEX, partially offset by lower revenues and higher tax rates."

For an analyst ratings summary and ratings history on First Solar click here. For more ratings news on First Solar click here.

Shares of First Solar closed at $18.07 yesterday.


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