First Solar (FSLR) Acquires European Solar Tech Firm Evolar AB
First Solar, Inc. FSLR recently acquired the European solar tech firm, Evolar AB, to further augment its research & development abilities in thin film photovoltaics (PV).
First Solar has to remit an acquisition price of $38 million. Subject to the achievement of certain technical milestones in the future, the company is accountable to pay an additional price of $42 million.
Advantages of the Acquisition
First Solar, which already enjoys a leading position in the manufacturing of thin film photovoltaics, aims to strengthen its manufacturing capability in the PV technology via the Evolar acquisition.
The fusion of Evolar’s know-how with First Solar’s expertise and existing manufacturing capacity will assist in developing an efficient next-generation PV technology and high-efficiency tandem devices.
The strategic acquisition will enable FSLR to align its current research and development abilities with that of Evolar, thus revolutionizing the manufacturing of next-generation photovoltaics with the most advanced technology.
U.S. Solar Market Boom & Peer Moves
Solar market in the United States is rapidly gaining traction thanks to federal policies and incentives that aim to ramp up the development of the solar market. Per the report from Solar Energy Industries Association, the solar market recorded an average annual growth rate of 33% in the past decade.
Per the report from Mordor Intelligence, the solar market is expected to witness a CAGR of 12.7% over the 2023-2028 period. Considering such abounding growth prospects, other solar majors are also expanding their production capacity to capitalize on the growing demand:
Enphase Energy ENPH enjoys a strong position as a leading U.S. manufacturer of microinverters. The company added an automated line at Flex's factory in Romania. This line, with a quarterly capacity of approximately 750,000 microinverters, will enable a global capacity of nearly six million microinverters per quarter, with plans to of expansion.
Enphase boasts a long-term earnings growth rate of 26%. Shares of ENPH have rallied 11% in the past year.
In January 2023,Canadian Solar CSIQ announced its plans to add vertically integrated high-efficiency wafer, cell and module capacity, as well as battery system manufacturing capacity, in Yangzhou’s clean energy manufacturing industrial park. The project plan will be carried out in three phases, with phase I being 14 GW of wafer and cell capacity.
The Zacks Consensus Estimate for Canadian Solar’s 2023 earnings suggests a growth rate of a solid 54.1% from the prior year’s reported figure. CSIQ has returned 48.6% to its investors in the past year.
Price Movement
In the past year, shares of First Solar have surged 269.1% compared with the industry’s growth of 45.5%.
Image Source: Zacks Investment Research
Zacks Rank & a Stock to Consider
First Solar currently carries a Zacks Rank #3 (Hold). A better-ranked stock from the same industry is JinkoSolar JKS, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
JinkoSolar delivered a trailing four-quarter earnings surprise of 193.96%. The Zacks Consensus Estimate for JinkoSolar’s 2023 sales indicates an improvement of 24.5% over the prior-year reported figure.
The Zacks Consensus Estimate for JKS’ 2023 earnings has been revised upward by 20.9% in the past 60 days. The Zacks Consensus Estimate for its 2024 earnings has been revised upward by 9.9% in the past 60 days.
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