First Solar (NASDAQ: FSLR) reported third-quarter 2026 earnings per share of $5.30 on Oct. 29, 2026, above the analyst estimate of $4.67, even though revenue of $1.23B was below the $1.29B estimate. The angle: management expects U.S. trade policy to help First Solar earn more per module over time, but Q3 showed a higher U.S. mix lifting margin while it sold fewer modules, and the company cut its 2026 volume outlook. The stock traded at $170.69 on its latest quote on Oct. 30, 2026, down 3.50% on the day.
Figures are current as of Oct. 30, 2026 and cover the quarter ended Sept. 30, 2026 unless stated otherwise.
Key facts
- Oct. 29, 2026: First Solar reported Q3 FY2026 (quarter ended Sept. 30, 2026) EPS of $5.30 vs. an estimate of $4.67 (a beat of $0.63, or 13.5%).
- Q3 FY2026: Revenue was $1.23B vs. an estimate of $1.29B (a miss of $58.2M, or 4.5%). That is 22.8% lower than the $1.59B in the third quarter ended Sept. 30, 2025.
- Q3 FY2026: Net income was $571.1M, 25.2% higher than a year earlier. Gross margin was 57.9% and operating margin was 44.4%.
- Oct. 30, 2026: The shares traded at $170.69, near the low end of a 52-week range of $165.86 to $320.95.
- Sept. 30, 2026: Cash and short-term investments were $1.62B against total debt of $325.0M.
- Next report: Feb. 23, 2027, with an EPS estimate of $5.7 and a revenue estimate of $1.49B.
The theme: management expects tariffs to turn "made in America" into a pricing advantage
The theme is trade protection in solar. The U.S. has added tariffs, duties and import rules, including a Section 232 proclamation issued in August 2026 whose full implementation is still ahead, that are meant to raise the cost of imported panels. A manufacturer that builds in the U.S. could then charge more, because its competitors face higher costs to bring product in.
First Solar makes most of its modules in the U.S., so it is a direct test of this idea, but the test is not finished. Q3 shows the margin gain from a higher U.S. mix alongside weaker volumes. The pricing benefit is what management expects, not a result already shown. Bradley said substantially all of the roughly 1.4 GW booked since the last call was contracted or in late-stage negotiation, with pricing and terms largely set ahead of Section 232.
What happened
According to the company, sales fell mainly because it sold fewer modules to third parties. Profit still rose. Management said gross margin (the share of each sales dollar left after production costs) was up roughly 20 percentage points from a year earlier. It credited this "primarily" to a higher mix of U.S.-produced modules. Lower sales-rate and utilization costs and lower tariff and duty costs also helped, partly offset by lower termination-related revenue (payments from customers who cancel contracts).
The company also lowered its 2026 outlook. Per the call, it now expects lower volumes from its India domestic business, international Series 6 modules (an older product line) and U.S. finishing, with a matching cut to revenue and adjusted EBITDA (a cash-profit measure). The transcript did not give new dollar amounts. Operating expense and net cash guidance were unchanged, while planned spending on perovskite, a next-generation solar material, was raised. The board also authorized a share repurchase program of up to $500 million.
On pricing, CEO Mark Widmar said: "Since the announcement of 232, we have revised and increased our pricing." He added that price discovery "is going to take a while," with U.S.-made Series 7 at the high end and imported Malaysian modules at the low end. He also said: "we believe we are structurally positioned to benefit from this environment."
On demand, management said its shift to project-specific contracts, customers' focus on near-term projects and market price discovery have moderated recent bookings by volume, and it reduced its India forecast. The backlog and bookings give a fuller picture. The company ended the quarter with 44 GW under contract, about $13.5B of contracted value, with deliveries through 2030. Since the last call it booked about 1.4 GW of U.S. gross bookings at about $0.36 per watt. Through the call date it booked about 4.9 GW in the U.S. at about $0.35 to $0.36 per watt. About 4 GW of variable volume under earlier contracts, priced for the pre-Section 232 environment, can still be elected by customers.
The cautious part came from CFO Alexander Bradley: "We're open for business, but I don't think we have a desperate urgency to be booking in that horizon right now." In answer to BNP Paribas analyst Moses Sutton, management said developers are focused on near-term hurdles such as grid connection, local opposition and a safe-harbor deadline, not on locking in volume for 2029. Bradley said project-by-project deals reduce visibility into 2029.
Why it matters for investors
Margins are the story. The five-quarter trend shows profitability rising while cash flow turned negative. The table shows that gap.
| Quarter (ended) | Revenue | Gross margin | Operating margin | Free cash flow | |---|---|---|---|---| | Q3 FY2025 (Sept. 30, 2025) | $1.59B | 38.3% | 29.2% | $1.07B | | Q4 FY2025 (Dec. 31, 2025) | $1.68B | 39.5% | 32.6% | $1.07B | | Q1 FY2026 (Mar. 31, 2026) | $1.04B | 46.6% | 33.1% | -$333.4M | | Q2 FY2026 (June 30, 2026) | $1.06B | 57.3% | 42.6% | -$306.2M | | Q3 FY2026 (Sept. 30, 2026) | $1.23B | 57.9% | 44.4% | -$197.8M |
Gross margin rose in each of the five quarters, while free cash flow (cash from operations minus capital spending) was positive in the first two and negative in the last three. The negative figure in the latest quarter is smaller than in the prior two, but it is still cash going out. Operating cash flow was -$42.9M and capital spending was $154.8M in Q3 FY2026. The company paid no dividends and bought back no shares in that quarter. UBS analyst Jon Windham raised roughly $1.9 billion of government grant receivables (tax credits owed to the company) from the presentation, and Bradley confirmed the figure and said the company is weighing sales of some credits against waiting for refunds. Our reading is that these receivables help explain part of the gap between reported profit and cash flow; management did not frame it that way. Bradley separately cited inventory, storage and working-capital costs as a financial drag.
Valuation looks low on earnings, high on cash. On a trailing 12-month basis, First Solar trades at a P/E (price divided by earnings) of 9.93, price/sales of 3.69 and EV/EBITDA of 6.78. Price/free cash flow is 79.40, which reflects the weak cash conversion. Its net margin is 37.1% and debt/equity is 0.03. The balance sheet shows net debt of negative $1.25B, meaning it holds more cash than debt. The Piotroski score (a 0-9 financial health check) is 6 and the Altman Z score (a bankruptcy-risk gauge) is 5.42.
Peers are not a clean comparison. The solar names in our peer set are far smaller and unprofitable. Ascent Solar (ASTI) has a P/E of -0.99 and a net margin of -4231.7%. Canadian Solar (CSIQ) has a P/E of -3.30 and a net margin of -3.7%. Jinko (JKS) has a P/E of -0.22 and a net margin of -5.9%. PN Smart Energy (PN) has a P/E of -0.17 and a net margin of -15.6%. First Solar's profit margin stands out against all four, but their market caps are tiny next to First Solar's $18.34B, so the comparison shows how unusual its profitability is, not that it is cheap relative to equals.
Analysts are more positive than the market. The consensus price target is an average of $267.17 and a median of $264.50, in a range from $197.00 to $326.00, all above the $170.69 share price. Of 74 ratings, 45 are buy, 22 are hold and 7 are sell, for a consensus of "Buy." On Oct. 30, 2026, GLJ Research downgraded the stock from Buy to Hold, while Needham, RBC Capital and Wells Fargo kept positive ratings, Evercore ISI stayed at In Line and Bernstein stayed at Underperform.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 is 61.1 (Fair). Relative to its sector, the pillars are growth 91, quality 86, safety 75, momentum 24 and valuation 33. In plain terms: strong profits, a solid balance sheet and growth, but weak price momentum and a valuation score that does not signal a bargain. These are our own data and not a recommendation.
What could go wrong
- Demand and visibility. Bradley referred to challenges in near-term book-to-bill on international volume. Developers face local opposition, a state moratorium that halted a large procurement after the Section 232 announcement, and rising battery and system costs.
- Policy is still moving. Final foreign-entity-of-concern guidance is pending, Section 232 minimum import prices and anti-stocking enforcement remain fluid, and Widmar said imports are "coming from every angle." Future trade exclusions are uncertain.
- Malaysia. Underused capacity there carries cost until a decision on its future, expected in the first half of 2027.
- Legal and spending. Spending to defend its TOPCon patents is rising and a lawsuit from Swift Current is pending. Widmar declined to comment on its merit.
- Cash. Free cash flow has been negative for three straight quarters. FMP's discounted cash flow model shows a value of -73.97 USD per share, a model output that reflects those negative cash flows and which we would not read as a fair-value signal.
- Insiders. Among the 30 most recent Form 4 filings, those in the last 90 days show 0 open-market purchases and 9 sales (older filings in the window may be missing).
What to watch next
1. The Feb. 23, 2027 report, against the EPS estimate of $5.7 and revenue estimate of $1.49B. 2. Price discovery. Whether higher post-Section 232 pricing sticks in new deals, and whether framework (multi-year) agreements return. 3. Cash conversion. Whether free cash flow turns positive as grant receivables are collected or sold. 4. The Malaysia decision and the 2027 production plans in India and South Carolina. 5. Final trade and foreign-entity guidance from Washington.
Frequently asked questions
Q: Did First Solar beat earnings in the third quarter of 2026?
First Solar beat on profit and missed on sales. Diluted EPS was $5.30 vs. an estimate of $4.67, while revenue of $1.23B was below the $1.29B estimate, in the quarter ended Sept. 30, 2026.
Q: Why did First Solar's margin rise while revenue fell?
Management said a higher mix of U.S.-produced modules drove the gross margin increase, with lower utilization costs and lower tariff and duty costs also helping. Gross margin was 57.9% in the quarter ended Sept. 30, 2026, vs. 38.3% a year earlier, while sales fell because fewer modules were sold to third parties.
Q: Is First Solar stock cheap after the Q3 2026 report?
That depends on the measure, and this is not investment advice. On Oct. 30, 2026, the trailing P/E was 9.93, but price/free cash flow was 79.40 because cash flow has been negative, and analysts' average price target of $267.17 sits well above the $170.69 share price. Our MoonshotScore valuation pillar is 33, a weak area.
Sources: Market data, financials, analyst figures and MoonshotScore are from Stock Expert AI and Financial Modeling Prep as of Oct. 30, 2026. Management comments come from the Oct. 29, 2026 earnings call transcript and the company's release. Headlines from Zacks, Benzinga and Seeking Alpha were used for context only.
This is educational content, not investment advice. Past performance does not guarantee future results.