First Solar, Inc. EBITDA jumped on 769% while Revenue dropped on 11.5%
02/25/2021 • About First Solar, Inc. (
$FSLR) • By InTwits
First Solar, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- First Solar, Inc. is a company in decline: 2020 revenue growth was -11.5%, 5 years revenue CAGR was -8.0%
- EBITDA Margin is quite volatile: 21.0% in 2020, 2.1% in 2019, 7.6% in 2018, 10.0% in 2017, -11.6% in 2016
- First Solar, Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.1%. At the same time it's a lot of higher than industry average of 7.3%.
- CAPEX is quite volatile: $417m in 2020, $669m in 2019, $740m in 2018, $514m in 2017, $229m in 2016
- The company has potentially unprofitable business model: ROIC is 5.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 11.5%. Revenue decline showed acceleration in 20Q4 - it was 56.5% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 18.9 pp from 2.1% to 21.0% in 2020.
Gross Margin increased on 7.2 pp from 17.9% to 25.1% in 2020. During 2016-2020 Gross Margin bottomed in 2018 at 17.5% and was growing since that time. SG&A as a % of Revenue increased slightly on 1.5 pp from 6.7% to 8.2% in 2020.
Net Income margin jumped on 18.4 pp from -3.8% to 14.7% in 2020.
Investments (CAPEX, working capital and M&A)
First Solar, Inc.'s CAPEX/Revenue was 15.4% in 2020. CAPEX/Revenue decreased on 2.1 pp from 17.5% in 2017 to 15.4% in 2020. Average CAPEX/Revenue for the last three years was 23.4%. First Solar, Inc. invested a big chunk of EBITDA (73.2%) to CAPEX which didn't stop revenue from falling. During the last 5 years CAPEX as a % of Revenue topped in 2018 at 33.0% and was declining since that time.
Return on investment
The company operates at low ROIC (5.4%) and ROE (7.5%). ROIC increased on 8.1 pp from -2.7% to 5.4% in 2020. ROE increased on 9.7 pp from -2.2% to 7.5% in 2020.
Leverage (Debt)
Debt level is -1.3x Net Debt / EBITDA and 0.8x Debt / EBITDA. Debt dropped on 19.0% while cash decreased on 9.3%.
First Solar, Inc. has no short term refinancing risk: cash is higher than short term debt (2,209.0%).
Valuation and dividends
First Solar, Inc.'s trades at EV/EBITDA 12.6x and P/E 19.9x.
Management team
First Solar, Inc.'s CEO is Mark R Widmar. Mark R Widmar has 4 years tenure with the company. The company's CFO Alexander R Bradley has spent 4 years with the company.
Financial and operational results
FY ended 12/31/2020
First Solar, Inc. ($FSLR) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 2,905 | 2,941 | 2,244 | 3,063 | 2,711 | -11.5% |
| Gross Profit | 638 | 549 | 392 | 549 | 681 | 23.9% |
| SG&A | 262 | 203 | 177 | 205 | 223 | 8.5% |
| EBITDA | -337 | 293 | 171 | 66 | 569 | 768.6% |
| EBIT | -568 | 178 | 40 | | | |
| Interest expence | 21 | 26 | 26 | | | |
| Tax | 23 | 372 | 3 | | | |
| Net Income | -416 | -166 | 144 | -115 | 398 | |
| Stock Based Compensation | 29 | 35 | 34 | | | |
Balance Sheet
|
|---|
| Cash | 1,347 | 2,269 | 1,404 | 1,353 | 1,227 | -9.3% |
| Accounts Receivable | 267 | 212 | 128 | | | |
| Inventory | 363 | 172 | 388 | | | |
| Accounts Payable | 149 | 120 | 233 | | | |
| Short Term Debt | 28 | 13 | 6 | 29 | 56 | 94.1% |
| Long Term Debt | 160 | 380 | 461 | 567 | 427 | -24.7% |
Cash flow
|
|---|
| Capex | 229 | 514 | 740 | 669 | 417 | -37.7% |
Ratios
|
|---|
| Revenue growth | -29.4% | 1.3% | -23.7% | 36.5% | -11.5% | |
| EBITDA growth | -134.1% | -186.9% | -41.7% | -61.6% | 768.6% | |
|
|---|
| Gross Margin | 22.0% | 18.7% | 17.5% | 17.9% | 25.1% | 7.2% |
| EBITDA Margin | -11.6% | 10.0% | 7.6% | 2.1% | 21.0% | 18.9% |
| EBIT Margin | -19.6% | 6.0% | 1.8% | | |
| SG&A, % of revenue | 9.0% | 6.9% | 7.9% | 6.7% | 8.2% | 1.5% |
| SBC, % of revenue | 1.0% | 1.2% | 1.5% | | |
| Net Income Margin | -14.3% | -5.6% | 6.4% | -3.8% | 14.7% | 18.4% |
| CAPEX, % of revenue | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% | -6.5% |
|
|---|
| ROIC | -9.6% | 3.2% | 0.7% | -2.7% | 5.4% | 8.1% |
| ROE | -7.7% | -3.2% | 2.8% | -2.2% | 7.5% | 9.7% |
| Net Debt/EBITDA | | -6.4x | -5.5x | -11.6x | -1.3x | 10.3x |
| Interest coverage ratio (ICR) | | 6.9x | 1.5x | | |
| Interest expence / Average debt | 10.9% | 8.9% | 6.0% | | | |
People
|
|---|
| Insider ownership | 0.7% | 0.7% | 0.7% | | | |
| Employees | 5,400 | 4,100 | 6,400 | | | |
| Revenue/Employee, th. $ | 538 | 717 | 351 | | | |
First Solar, Inc. ($FSLR) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 532 | 642 | 928 | 609 | | 0.0% | 9.8% | 69.6% | -56.5% |
| EBITDA | 62 | 113 | 271 | 122 | | - | 141.4% | 176.2% | - |
| Net Income | 91 | 37 | 155 | 116 | | - | - | 406.3% | - |
Balance Sheet
|
|---|
| Cash | 929 | 1,053 | 1,277 | 1,227 | | -8.3% | -13.8% | 45.3% | -9.3% |
| Short Term Debt | 94 | 91 | 55 | 56 | | 273.1% | 129.6% | 39.2% | 94.1% |
| Long Term Debt | 516 | 585 | 405 | 427 | | -25.3% | -0.0% | -31.8% | -24.7% |
Ratios
|
|---|
| Gross Margin | 17.0% | 21.4% | 31.6% | 26.2% | | 17.0% | 8.2% | 6.3% | 2.4% |
| EBITDA Margin | 11.7% | 17.6% | 29.3% | 20.1% | | 15.9% | 9.6% | 11.3% | 24.2% |
| Net Income Margin | 17.0% | 5.7% | 16.7% | 19.0% | | 29.8% | 8.9% | 11.1% | 23.2% |
Peers in Semiconductors
Below we provide First Solar, Inc. benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 11.0% | 4.9% | -3.2% | 2.8% |
|---|
| First Solar, Inc. ($FSLR) | - | 1.3% | -23.7% | 36.5% | -11.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 48.0% | 49.1% | 50.4% | 50.7% | 49.4% |
|---|
| First Solar, Inc. ($FSLR) | 22.0% | 18.7% | 17.5% | 17.9% | 25.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.8% | 13.6% | 17.3% |
|---|
| First Solar, Inc. ($FSLR) | -11.6% | 10.0% | 7.6% | 2.1% | 21.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| Rambus, Inc. ($RMBS) | 2.5% | 2.4% | 4.7% | 2.9% | 12.2% |
| |
|---|
| Median (40 companies) | 3.6% | 4.7% | 4.2% | 3.7% | 3.6% |
|---|
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.7% | 3.2% | 3.0% | 3.8% | 5.4% |
|---|
| First Solar, Inc. ($FSLR) | -9.6% | 3.2% | 0.7% | -2.7% | 5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| |
|---|
| Median (31 companies) | 0.2x | 0.4x | 0.3x | 0.5x | 0.5x |
|---|
| First Solar, Inc. ($FSLR) | - | -6.4x | -5.5x | -11.6x | -1.3x |
