Is First Solar, Inc. (FSLR) the Most Undervalued Renewable Energy Stock to Buy?
May 1, 2025
We recently published a list of 10 Most Undervalued Renewable Energy Stocks To Buy Right Now. In this article, we are going to take a look at where First Solar, Inc. (NASDAQ:FSLR) stands against other most undervalued renewable energy stocks.
In 2024, global energy demand increased by 2.2%, quicker than the average over the last decade. Electricity use rose significantly, up 4.3% from last year, primarily due to hotter temperatures, electrification, and the growing digital sector. Renewables were the biggest contributors to the higher energy supply, followed by natural gas and coal. Most of the demand growth came from emerging economies, especially China and India. Natural gas had the strongest growth among fossil fuels, while oil demand softened, plunging below 30% of the energy mix for the first time in 50 years. According to the International Energy Agency, more than 80% of new electricity generation came from renewables and nuclear power in 2024. Solar and wind energy hit new records, and EV sales skyrocketed past 17 million units.
Solar capacity grew by 88% last year, helping it overtake hydropower and nuclear as the fourth largest source of installed capacity. While wind power faced hurdles like supply chain issues and permitting delays, it still set a new generation record and even outperformed coal for two straight months. Battery storage also saw impressive growth, rising by 64%, as utilities used it to store extra wind and solar energy. Looking ahead to 2025, Deloitte expects clean energy demand to grow even more, driven by the rise of clean tech manufacturing, data centers, and carbon capture projects, all of which are increasingly relying on 24/7 clean power.
The American nonprofit organization, Resources for the Future, noted that clean energy saw a major boost with a record $2 trillion invested in technologies like renewables and energy-efficient infrastructure during 2024. This sped up the global energy transition, especially in solar and wind power. While renewables are now some of the cheapest energy sources, fossil fuels, especially coal and gas, still make up a big part of global energy use. Coal is expected to decline significantly by 2050, while the role of gas depends on how ambitious climate policies become. Regions like the United States, Europe, and especially China have led solar growth, but other countries are starting to catch up. However, high costs and financial risks in developing countries could slow things down.
A solar panel farm with an orange sky illuminating the vast landscape.
For this article, we made a list of all renewable energy stocks listed on American exchanges and picked the 10 stocks with the lowest P/E ratios to compile this list. We have also mentioned the hedge fund sentiment around the holdings, as per Insider Monkey’s Q4 2024 database, ranking the list from least to most hedge fund holders.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
PE Ratio as of April 30: 11.42
Number of Hedge Fund Holders: 65
First Solar, Inc. (NASDAQ:FSLR) is an American solar tech company that develops and sells advanced thin-film solar panels, offering a cleaner alternative to traditional silicon modules. FSLR ranks 3rd on our list of the most undervalued stocks in the clean energy space.
On April 30, TD Cowen maintained a Buy rating on First Solar, Inc. (NASDAQ:FSLR) but slashed the price target to $200 from $275. TD Cowen analysts revised their outlook on First Solar, citing both strengths and risks. The company remains financially strong with a 43.6% gross margin and stable backlog prices, and it is expanding US production to 14GW by 2026. However, tariff risks, IRA policy uncertainty, and potential production halts in Asia have led to a lowered 2025 guidance.
First Solar, Inc. (NASDAQ:FSLR)’s Q1 2025 results indicate a dip in sales and profit, with revenue falling to $0.8 billion and earnings per share dropping to $1.95, down from $3.65 per share last quarter. The decline was mainly due to seasonal sales slowdown and investments in a new manufacturing facility in Louisiana. Cash reserves also fell to $0.4 billion. Despite near-term challenges like new tariffs, First Solar, Inc. (NASDAQ:FSLR) remains confident in the long-term American solar market. It has revised its 2025 outlook and expects Q2 earnings to land between $2 and $3 per share, due in part to federal tax credits and its strong domestic manufacturing footprint.
According to Insider Monkey’s fourth quarter database, 65 hedge funds were bullish on First Solar, Inc. (NASDAQ:FSLR), compared to 59 funds in the last quarter. Samlyn Capital was a notable stakeholder of the company, with 1.63 million shares worth $288.75 million.
Overall, FSLR ranks 3rd among the 10 Most Undervalued Renewable Energy Stocks To Buy Right Now. While we acknowledge the potential of undervalued renewable energy stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than FSLR but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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