First Solar Inc. (NASDAQ:FSLR)

The analysis of the financial ratios over the several quarters reveals distinct patterns and fluctuations in valuation metrics.

Price to earnings (P/E) ratio

The P/E ratio data starts becoming available in mid-2020 and shows a generally volatile pattern. Initially, it decreased from 107.84 to a low of 15.73 by March 2021, indicating a potential improvement in earnings relative to the stock price or a price correction. However, afterwards, there is significant variability with a sharp spike in late 2022 reaching 149.27 and an exceptionally high value of 515.1 in mid-2023, suggesting an extraordinary market valuation or a sudden dip in earnings. Subsequently, a substantial decline occurs through the end of 2023 and into mid-2024, stabilizing around 17 to 18, which may imply a return to more normalized valuation levels.

Price to operating profit (P/OP) ratio

Starting in late 2019, the P/OP ratio exhibits a downward trend from 69.71 to approximately 14.32-14.57 by late 2020, potentially reflecting improving operating profitability or adjustments in share price. Yet similar to the P/E ratio, sharp increases occur in late 2022 and mid-2023, peaking at 441.71 and 293.92 respectively, then sharply falling back below 40 by early 2024 and maintaining a low teens to mid-teens range thereafter. The pronounced spikes suggest periods of diminished operating profits relative to price or sharp price gains not yet matched by profit growth.

Price to sales (P/S) ratio

This ratio shows a more consistent and gradual upward trend over the period from early 2019 to mid-2024. Starting at about 1.74 in early 2020, the ratio increases steadily, peaking at 7.66 in mid-2023 before a moderate decrease to around 5.5 in the most recent quarters. The upward trajectory generally reflects rising stock prices relative to sales, which may indicate growing investor confidence or expectations of future revenue growth.

Price to book value (P/BV) ratio

The P/BV ratio fluctuates moderately across the quarters with no clear long-term trend. It initially stayed close to or below 1.5 through 2019 and 2020, indicating valuations near book value. Starting in 2021, the ratio increased noticeably, reaching above 3 by late 2022 and remaining elevated near 2.8 to 3.6 through mid-2024. This suggests an increased market premium over book value, possibly due to improved expectations of future profitability or intangible asset growth impacting valuation.

In summary, all valuation ratios experienced heightened volatility especially from late 2022 through mid-2023, with extreme peaks in earnings and operating profit multiples indicating episodic disparities between market price and fundamental earnings measures. The price to sales ratio, however, maintained a general rise indicating growing market valuation relative to revenue. Meanwhile, the price to book ratio points to a sustained increase in market premium over book value in recent years. These trends highlight periods of market reevaluation and may warrant further investigation into earnings quality, profit sustainability, and revenue drivers to fully understand the underlying causes of the observed volatility.

The share price of the company exhibited considerable volatility over the shown periods. Starting at $61.76 in March 2019, it experienced moderate fluctuations during 2019 and early 2020, reaching a low of $44.16 in March 2020. Thereafter, the price generally trended upward with some fluctuations, peaking notably at $210.89 in June 2024 before slightly declining to $199.67 in September 2024. The share price's overall trajectory suggests intervals of significant growth interspersed with corrections.

Earnings per share (EPS) data became available starting in the first quarter of 2020, showing an initial slight loss of -$1.09 in December 2019 followed by positive growth in subsequent periods. EPS progressively increased, peaking at $5.29 in September 2021. After this, EPS experienced a downward correction, reaching negative territory again at -$0.41 in March 2023. Following this dip, EPS rebounded strongly, culminating in a peak of $11.66 in September 2024. This pattern indicates that earnings experienced growth with intermittent volatility but overall demonstrated resilience and recovery.

The price-to-earnings (P/E) ratio, which was not available before March 2020, initially exhibited very high values, reaching 149.27 in September 2022 and exceeding 500 in December 2022, periods when EPS was low or negative, indicating stock price valuations were disconnected from earnings or that earnings were temporarily depressed. Subsequently, as earnings improved, the P/E ratio decreased substantially, settling in the range of approximately 17 to 19 in mid to late 2024. This trend suggests that market valuation became more aligned with earnings performance toward the most recent periods.

In summary, the company's financial indicators reflect an evolving scenario characterized by share price appreciation accompanied by fluctuating earnings per share and considerable variation in valuation multiples. The recent stabilization of the P/E ratio coupled with rising EPS and high share prices points to improved market confidence in the company's earnings prospects.

The analysis of the quarterly data reveals several notable trends in the share price, operating profit per share, and the price-to-operating-profit ratio over the observed periods.

Share Price

The share price demonstrates significant volatility with an overall upward trend from early 2019 to mid-2024. Initially, the price fluctuated moderately between approximately $50 and $70 through 2019 and the first half of 2020, peaking briefly at $93.31 in September 2020. Following this, the share price experienced a period of variability but generally increased, reaching highs above $130 from late 2021 through 2023, and notably surging towards $200 or more in some quarters of 2023 and early 2024. Peaks occurred in September 2022 ($132.67), December 2022 ($169.14), and June 2024 ($210.89). Occasional moderate pullbacks were observed, but the trend indicates strong investor confidence or positive market sentiment driving the share price upward over the medium term.

Operating Profit Per Share

Operating profit per share has shown substantial improvement over time. The data begins with negative values in 2019, reaching a low of -1.53 USD per share in December 2019, indicating operating losses during this period. From early 2020 onward, the operating profit per share steadily increased, turning positive by Q4 2020, reaching 1.34 USD. Thereafter, profits generally rose, peaking at 5.9 USD in Q3 2021 before experiencing some fluctuations between 1.8 and 5.52 USD through late 2021 and 2022. A slight decline occurred towards the end of 2022 with a negative operating profit of -0.26 USD in Q4 2022, possibly reflecting temporary operational challenges. However, since early 2023, operating profit per share resumed growth, reaching peak levels above 12 USD by the end of 2024. This overall trajectory reflects operational improvements, effective cost management, and revenue growth contributing to increased profitability per share over the period.

Price-to-Operating Profit Ratio (P/OP)

The P/OP ratio exhibits considerable fluctuation, closely linked to changes in both share price and operating profit per share. With operating profit per share negative or near zero initially, the ratio was not applicable or not meaningful in the early periods. As operating profit turned positive in late 2020, the ratio was initially high (69.71) due to low profit levels relative to share price. Over time, the ratio generally declined, reflecting improved profitability, reaching more moderate values near 14-27 in 2021, though periodic spikes occurred, such as in Q1 2022 (26.24) and Q4 2022 (73.73), associated with dips in operating profit. Extremely high ratios in mid-2023 (441.71) and late 2023 (293.92) indicate temporary mismatches where share prices were relatively high compared to operating profits, perhaps due to market expectations or transient profit declines. Towards mid-2024, the ratio stabilized around 16-18, suggesting a more balanced valuation consistent with improved profitability and elevated share prices.

In summary, the financial data reveals a company experiencing initial operating challenges that have been largely overcome, resulting in increased operating profits per share and strong share price appreciation. The volatility in valuation multiples signals periods of market speculation or uncertainty, but the overall trend indicates strengthening financial health and positive market perception by mid-2024.

The share price exhibited notable fluctuations over the observed periods, beginning at $61.76 in March 2019 and peaking at $210.89 in June 2024. Initial volatility was evident, with a significant dip from $66.63 in June 2019 to $44.16 in March 2020, followed by a marked recovery and subsequent rise to $169.14 by December 2022. The price demonstrated strong upward momentum in recent quarters, despite a few intermittent declines such as from $200.83 in March 2023 to $142.45 in September 2023. The overall trend indicates growing market confidence reflected in the rising share price, culminating near $200 towards mid-2024.

Sales per share information is available from March 2020 onwards, starting at $29.05 and generally maintaining a steady, incremental increase through to September 2024, reaching $35.97. There were minor oscillations, with some declines observed between December 2020 and March 2022, but the longer-term trajectory displays growth in sales per share, implying improved operational performance or revenue generation per individual share.

The Price-to-Sales (P/S) ratio reveals considerable variability, echoing the dynamics observed in both share price and sales per share. The ratio began at 1.74 in March 2020, dropped to 1.53 in June 2020, then surged to as high as 7.66 by June 2023, reflective of rising valuation multiples relative to sales. This escalation in P/S suggests heightened investor expectations or market valuation outpacing sales growth during certain periods. However, the ratio also showed declines, notably dropping to 4.67 in June 2024 from previous highs. The fluctuating P/S ratio underscores a complex interplay between stock price appreciation and sales trends, with valuation metrics periodically adjusting to underlying business fundamentals and market sentiment.

In synthesis, the data indicates a general upward progression in share price and sales per share with intermittent corrections. The increasing P/S ratio over time points to a market valuation that, in certain intervals, grew disproportionately compared to sales, highlighting potential periods of investor optimism. Recent quarters maintain a positive outlook, with elevated share prices and steady sales suggesting continued growth prospects.

Share Price Trends

Fluctuated significantly from $61.76 to $210.89, with major dips during early 2020 followed by a sharp recovery and sustained growth.

Recent trends show elevated levels, though with occasional pullbacks.

Sales Per Share Patterns

Generally increased from $29.05 to $35.97 over the period, with minor short-term declines.

Indicates steady growth in revenue attributable to each share.

Price-to-Sales Ratio Dynamics

Started low near 1.7, rose dramatically to a peak above 7.6, signaling rising price relative to sales.

Experienced volatility suggesting fluctuating valuation multiples in reaction to market and business factors.

Overall Insights

Strong upward trend in both share price and sales per share supports an improving business outlook.

Valuation metrics imply periods of heightened investor optimism and subsequent corrections.

The financial data reveals distinct patterns and fluctuations over the observed periods, particularly concerning share price, book value per share (BVPS), and the Price-to-Book Value (P/BV) ratio.

Share Price

The share price exhibited significant volatility throughout the timeframe. Initially, it ranged between approximately $50 and $66 in 2019, followed by a notable increase and variability in 2020 and 2021, reaching a peak of around $116 in September 2021. In 2022 and early 2023, the price experienced substantial growth, culminating in a maximum of roughly $200 in March 2023. Subsequent months showed some decline and fluctuation, with prices settling near $200 in mid-2024, indicating an overall upward trend, despite intermittent short-term decreases.

Book Value per Share (BVPS)

BVPS showed a steady, gradual increase throughout the entire period. Starting near $48.69 in early 2019, it moved upward consistently, reaching approximately $70.93 by September 2024. This increase is relatively modest compared to the fluctuations seen in share price but indicates steady growth in the company's net asset value per share over time.

Price-to-Book Value (P/BV) Ratio

The P/BV ratio presented considerable oscillations. It began at around 1.27 in early 2019, declining to a low near 0.9 by March 2020, indicating the share was valued below the book value per share at that point. Following this, the ratio sharply increased multiple times, achieving values as high as about 3.66 by March 2023—reflecting periods when the market price significantly exceeded the book value. After peaking, the ratio fluctuated but generally maintained elevated levels above 2.0, which suggests investor confidence and potentially optimistic market expectations during the latter half of the timeline.

In summary, the data indicates a steady increase in book value per share, reflecting ongoing growth in the company's fundamental financial base. Meanwhile, the share price demonstrated marked volatility but an overall upward trajectory, especially notable from 2021 onward. The P/BV ratio's fluctuations emphasize changing market sentiments and valuations relative to book value, with pronounced peaks suggesting periods of strong investor optimism or growth expectations.