Ariel Global Fund on First Solar, Inc.
Thesis
Ariel believes the market undervalues First Solar by treating it simply as a rate-sensitive renewable energy company. The business delivered stronger margins and earnings while retaining full-year guidance. Its contracted backlog runs through the end of the decade, providing unusual demand visibility. As the only U.S. solar-module manufacturer operating at scale, it could benefit from domestic manufacturing incentives and supportive pricing, producing earnings power above the share price's implication.
“earnings power well above what its share price implies.”
Key risks
- Higher long-term rates pressuring renewable energy valuations
- Investor concerns over the chosen federal-court route for patent claims rather than the International Trade Commission
- Policy dependence on domestic manufacturing incentives