Enerflex (EFXT) Q3 Earnings Match Estimates

FTC Solar (FTCI) came out with a quarterly loss of $0.10 per share versus the Zacks Consensus Estimate of a loss of $0.08. This compares to loss of $0.08 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -25%. A quarter ago, it was expected that this solar tracking systems maker would post a loss of $0.09 per share when it actually produced a loss of $0.09, delivering no surprise.

Over the last four quarters, the company has not been able to surpass consensus EPS estimates.

FTC Solar, which belongs to the Zacks Solar industry, posted revenues of $10.14 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.66%. This compares to year-ago revenues of $30.55 million. The company has topped consensus revenue estimates three times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

FTC Solar shares have lost about 24.8% since the beginning of the year versus the S&P 500's gain of 25.8%.

What's Next for FTC Solar?

While FTC Solar has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for FTC Solar: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.06 on $20.89 million in revenues for the coming quarter and -$0.33 on $54.77 million in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Solar is currently in the bottom 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Canadian Solar (CSIQ), is yet to report results for the quarter ended September 2024. The results are expected to be released on December 5.

This solar wafers manufacturer is expected to post quarterly loss of $0.44 per share in its upcoming report, which represents a year-over-year change of -237.5%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Canadian Solar's revenues are expected to be $1.69 billion, down 8.6% from the year-ago quarter.

Zacks Investment Research

First Solar Inc.’s FSLR third-quarter 2024 earnings and sales missed their respective Zacks Consensus Estimate. However, on a year-over-year basis, both top and bottom-line figures improved by double-digit, primarily backed by an increase in the volume of modules sold.

The company has lowered its sales guidance for 2024, taking into account the termination of the Plug Power contract as well as unfavorable average selling prices of its modules in some markets, particularly India. First Solar has also narrowed its earnings guidance for the year.

This might discourage investors interested in solar stocks from investing in FSLR. However, before making any hasty decision, it would be prudent to take a look at how FSLR has performed so far in terms of share price return, the stock’s prospects as well as risks (if any) to investing in the same. This should help investors make a more insightful decision.

FSLR Stock Outperforms Industry & Sector

First Solar’s shares have surged an impressive 14.7% in the year-to-date period, outperforming the Zacks solar industry’s decline of 32.2% as well as the broader Zacks Oil-Energy sector’s return of 2.1%.

FSLR’s YTD Performance

First Solar has also outpaced the year-to-date performance of a handful of other heavy-weight industry players like SolarEdge Technologies SEDG, Canadian Solar CSIQ and Enphase Energy ENPH, which have witnessed a loss of 81.9 %, 46.1% and 37.6%, respectively.

What Led to FSLR Stock’s Price Surge?

Steadily increasing solar energy demand has been boosting solar installation trends worldwide, thereby pushing up the shipment of solar products like modules manufactured by First Solar. Solid product shipments have been fetching solid revenue growth for the company. Evidently, an estimated 292 gigawatts (GW) of global solar capacity has been installed up to July 2024, as per a report published by a London-based energy research firm Ember.

Consequently, First Solar sold 3 GW of solar modules in the third quarter, which resulted in a solid 10.8% year-over-year improvement in its net sales. Such solid module shipments also boosted the company’s gross profit, which improved 18.4% year over year. The bottom line surged 16.4%. This growth trend tallies with the operating results reported by the company in the prior two quarters of 2024. This, in turn, must have been bolstering investors’ confidence in this stock, which got reflected in the form of solid price surge so far this year.

Will FSLR Stock Continue to Grow?

To meet the growing solar demand, First Solar has been investing heavily in expanding its manufacturing capacity. Notably, First Solar is currently in the process of expanding its manufacturing capacity by approximately 5.8 GW. Through its vigorous expansion, the company expects to have an annual manufacturing capacity of more than 25 GW by the end of 2026.

To this end, it is imperative to mention that in 2024, First Solar expects to invest $1.6 billion in building new manufacturing facilities, expanding existing ones, and upgrading machinery and equipment.

Being the largest solar PV manufacturer in the Western Hemisphere, First Solar enjoys a significant dominance in the U.S. solar market and thereby continues to expand and invest in its domestic manufacturing in the United States. First Solar has recently commenced operations at its fourth manufacturing facility in the United States to further strengthen its footprint in this nation. FSLR is also in the process of expanding its manufacturing capacity, including the construction of its fifth manufacturing facility in the United States, which is expected to commence operations in the second half of 2025.

Such expanding strategies should enable FSLR to duly meet its production target of 15.6-15.9 GW and sell 14.2-14.6 GW of solar modules (by 2024-end), thereby boosting its revenue and earnings growth prospects.

A quick sneak peek at FSLR’s near-term earnings and sales estimates mirrors similar improvement trends.

Upbeat Estimates for FSLR Stock

The Zacks Consensus Estimate for fourth-quarter revenues and earnings reflects a solid improvement of 33.6% and 47.7%, respectively, from the prior-year level.

The annual estimate figures also indicate a similar picture. The Zacks Consensus Estimate for 2024 earnings indicates an improvement of 72.4% from the 2023 level, while that for revenues implies a surge of 33.2%. Its 2025 estimates also reflect similar growth trends.