For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
So if this idea of high risk and high reward doesn’t suit, you might be more interested in profitable, growing companies, like First Solar (NASDAQ:FSLR). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
In the last three years First Solar’s earnings per share took off; so much so that it’s a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we’ll zoom in on growth over the last year, instead. Over the last year, First Solar increased its EPS from US$11.26 to US$11.72. That’s a fair increase of 4.1%.
One way to double-check a company’s growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. On the revenue front, First Solar has done well over the past year, growing revenue by 15% to US$4.3b but EBIT margin figures were less stellar, seeing a decline over the last 12 months. So if EBIT margins can stabilize, this top-line growth should pay off for shareholders.
You can take a look at the company’s revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
NasdaqGS:FSLR Earnings and Revenue History September 8th 2025
It’s said that there’s no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. That’s because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don’t always get it right.
Even though there was some insider selling over the last year, that was outweighed by company insider Farhad Ebrahimi’s huge outlay of US$357m, spent buying shares. The average price of which was US$197 per share. Insider buying like this is a rare occurrence and should stoke the interest of the market and shareholders alike.
On top of the insider buying, it’s good to see that First Solar insiders have a valuable investment in the business. Notably, they have an enviable stake in the company, worth US$1.2b. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company’s future.
Shareholders have more to smile about than just insiders adding more shares to their already sizeable holdings. That’s because First Solar’s CEO, Mark Widmar, is paid at a relatively modest level when compared to other CEOs for companies of this size. For companies with market capitalisations over US$8.0b, like First Solar, the median CEO pay is around US$14m.
The First Solar CEO received total compensation of just US$6.4m in the year to December 2024. First impressions seem to indicate a compensation policy that is favourable to shareholders. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of a culture of integrity, in a broader sense.
As previously touched on, First Solar is a growing business, which is encouraging. In addition, insiders have been busy adding to their sizeable holdings in the company. That should do plenty in prompting budding investors to undertake a bit more research – or even adding the company to their watchlists. It’s still necessary to consider the ever-present spectre of investment risk. We’ve identified 1 warning sign with First Solar , and understanding it should be part of your investment process.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
