Solar energy as a group is in the doldrums. There are bright spots though, like First Solar, which got a Relative Strength Rating upgrade Wednesday, from 66 to 75, amid outstanding profit growth. First Solar stock was down Wednesday afternoon.
First Solar Stock Approaching Milestone
The upgraded 75 Relative Strength Rating means that First Solar stock tops 75% of all stocks, regardless of industry, for price performance this past year. Research shows that the best stocks tend to have an RS Rating of at least 80 in the early stages of their moves. See if First Solar can continue to show renewed price strength and clear that threshold.
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Earnings for the Tempe, Ariz.-based company soared 206% last quarter to $1.59 per share. EPS the quarter before that rose 198%. However, before that it posted two quarters of losses at the end of 2022. Sales, however, grew every quarter this past year. Last quarter revenue grew 31% to $810 million, down from a 49% surge the prior quarter.
First Solar stock traded at 60.96 in mid-July 2022. From there it soared to a 232 intraday high on May 12 this year, a 280% gain and its highest price since 2008. It's consolidated recently and traded at 181 Wednesday afternoon. While it's not currently an ideal time to jump into First Solar stock, see if the watchlist candidate manages to offer and clear a proper buy point.
Strong No. 3 Rank In 25-Company Group
Among its other key ratings, First Solar stock has a so-so 71 Composite Rating, a composite of five other fundamental and technical ratings. Its EPS Rating is a stronger 82, due to its exemplary earnings growth so far this year. One yellow flag is its D+ Accumulation/Distribution Rating, on an A+ to E scale. The D+ rating shows that big funds are selling more shares than buying.
On the upside, First Solar stock holds the No. 3 rank among its peers in the 25-stock Energy-Solar industry group. Nextracker, which develops and sells systems to track the sun's movement across the sky, is No. 2 in the group. Array Technologies, which sells ground-mounting systems for solar devices, is No. 1. As a group, solar energy ranks a dismal No. 196 on IBD's list of 197 industry groups.
When researching the best stocks to buy and watch, relative price strength vs. other stocks deserves attention.
IBD's proprietary RS Rating measures market leadership by showing how a stock's price action over the last 52 weeks compares to that of the other stocks in our database.
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