Jim Cramer Flags First Solar’s ‘Awful Quarter’ and Margin Risks
First Solar posted a deeply disappointing quarter, trading at 16 times earnings and prompting calls to wait until the next financial report before considering new positions. Freedom Capital’s recent downgrade adds to the headwinds facing the thin-film solar module maker despite its long-term sustainability edge.
1. Earnings Disappointment and Valuation Concerns
First Solar’s latest quarter fell well short of expectations, leading key commentators to highlight troubling revenue and margin shortfalls. The stock’s current valuation at 16 times earnings has been labeled excessive given the weak near-term results.
2. Cramer’s Warning on Margin Purchases
The Mad Money host explicitly cautioned investors against buying FSLR shares on margin after the disappointing report, advising to wait for the next earnings release before reassessing the position. This margin warning underscores concerns over potential volatility if results fail to improve.
3. Freedom Capital’s Downgrade Adds Pressure
In tandem with public criticism of the quarter, Freedom Capital downgraded First Solar’s stock, citing mounting short-term headwinds. The downgrade reinforces investor caution despite the company’s technological leadership in thin-film solar modules.