Why We Remain Bullish On First Solar Despite The Recent Selloff

The stock trades at its book value and is priced at about 16x FY2016 consensus estimates, which is relatively low for a firm in a high-growth industry. Although First Solar faces some challenges in sustaining its margins as it winds down lucrative legacy projects in the U.S., we believe that its longer-term revenue growth should remain reasonably strong, due to its rapidly evolving technology, adequate manufacturing capacity and its move to form a joint-venture yieldco with rival SunPower .