Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
First Solar Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
An analysis of the cash flow dynamics between 2019 and 2023 reveals a significant divergence between operational cash generation and the free cash flow available to equity holders.
- Net Cash Provided by Operating Activities
- Operational cash flow exhibited substantial volatility over the five-year period. After a decline from 174,201 thousand US dollars in 2019 to 37,120 thousand US dollars in 2020, a strong recovery trend emerged. This culminated in a peak of 873,369 thousand US dollars in 2022, representing the highest operational cash yield in the period. While a contraction occurred in 2023, with values receding to 602,260 thousand US dollars, the level remained significantly elevated relative to the 2019-2021 baseline.
- Free Cash Flow to Equity (FCFE)
- The FCFE remained predominantly negative throughout the analyzed timeframe, indicating that cash outflows for capital expenditures or debt repayments consistently exceeded operational cash inflows. Negative values were observed in 2019, 2020, 2021, and 2023, with the most significant deficit occurring in 2020 at -448,180 thousand US dollars. A notable exception occurred in 2022, where FCFE pivoted to a positive 291,248 thousand US dollars, coinciding with the peak in operating cash flow.
- Correlation and Capital Intensity
- A persistent gap is observed between operating cash flow and FCFE. Even in years with positive operational cash flow, such as 2019 and 2021, the FCFE remained negative. The return to a negative FCFE of -416,532 thousand US dollars in 2023, despite a robust operating cash flow of 602,260 thousand US dollars, suggests a period of intense capital reinvestment or significant financing obligations that outweigh the cash generated from core business operations.
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Price to FCFE Ratio, Current
First Solar Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 107,057,732 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | (416,532) |
| FCFE per share | -3.89 |
| Current share price (P) | 199.67 |
| Valuation Ratio | |
| P/FCFE | — |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Advanced Micro Devices Inc. | 113.83 |
| Analog Devices Inc. | 36.95 |
| Applied Materials Inc. | 48.94 |
| Broadcom Inc. | 64.46 |
| Intel Corp. | — |
| KLA Corp. | 51.83 |
| Lam Research Corp. | 66.88 |
| Marvell Technology Inc. | 76.69 |
| Micron Technology Inc. | 18.39 |
| NVIDIA Corp. | 49.89 |
| Qualcomm Inc. | 14.09 |
| Texas Instruments Inc. | 93.26 |
| P/FCFE, Sector | |
| Semiconductors & Semiconductor Equipment | 203.91 |
| P/FCFE, Industry | |
| Information Technology | 76.41 |
Based on: 10-K (reporting date: 2023-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
First Solar Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 106,848,929 | 106,609,094 | 106,333,764 | 105,986,398 | 105,457,669 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | (416,532) | 291,248) | (246,193) | (448,180) | (404,483) | |
| FCFE per share3 | -3.90 | 2.73 | -2.32 | -4.23 | -3.84 | |
| Share price1, 4 | 144.99 | 169.14 | 75.62 | 81.02 | 50.59 | |
| Valuation Ratio | ||||||
| P/FCFE5 | — | 61.91 | — | — | — | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Advanced Micro Devices Inc. | 241.70 | 33.46 | 44.72 | — | — | |
| Analog Devices Inc. | 22.28 | 24.14 | 34.67 | 33.98 | — | |
| Applied Materials Inc. | 17.53 | 19.17 | 27.20 | 23.21 | — | |
| Broadcom Inc. | 30.06 | 14.62 | 22.35 | 9.16 | — | |
| Intel Corp. | — | — | 14.25 | — | — | |
| KLA Corp. | 26.78 | 9.01 | 28.06 | — | — | |
| Lam Research Corp. | 18.67 | 24.95 | 34.58 | — | — | |
| Marvell Technology Inc. | 34.85 | 13.90 | 72.25 | — | — | |
| Micron Technology Inc. | — | 18.66 | 37.24 | — | — | |
| NVIDIA Corp. | 151.07 | 54.83 | 35.22 | — | — | |
| Qualcomm Inc. | 11.97 | 19.13 | 17.93 | 34.91 | — | |
| Texas Instruments Inc. | 37.61 | 23.88 | 21.87 | — | — | |
| P/FCFE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 47.29 | 28.10 | 25.18 | — | — | |
| P/FCFE, Industry | ||||||
| Information Technology | 33.12 | 26.68 | 27.39 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 Data adjusted for splits and stock dividends.
3 2023 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= -416,532,000 ÷ 106,848,929 = -3.90
4 Closing price as at the filing date of First Solar Inc. Annual Report.
5 2023 Calculation
P/FCFE = Share price ÷ FCFE per share
= 144.99 ÷ -3.90 = —
6 Click competitor name to see calculations.
The share price exhibited a significant upward trajectory from 2019 to 2022, rising from US$ 50.59 to a peak of US$ 169.14, before experiencing a correction to US$ 144.99 in 2023. This growth in market valuation occurred despite persistent instability in the underlying cash flows available to equity holders.
- Free Cash Flow to Equity (FCFE) per share
- FCFE per share remained negative for the majority of the analyzed period, indicating that the entity did not generate sufficient cash flow to cover its capital expenditures and debt obligations without external financing or utilizing cash reserves. A deficit was maintained from 2019 through 2021, with a temporary shift to a positive value of US$ 2.73 in 2022. However, this trend reversed in 2023, with FCFE returning to a negative value of US$ -3.90.
- Price to FCFE (P/FCFE) Ratio
- The P/FCFE ratio is only calculable for the 2022 fiscal year, as the negative FCFE values in 2019, 2020, 2021, and 2023 render the ratio mathematically irrelevant for those periods. In 2022, the ratio stood at 61.91, reflecting a high valuation multiple. This suggests that the market price was significantly decoupled from current cash flow generation, likely driven by expectations of future growth rather than current liquidity yields.
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