Shares jumped as investors positioned ahead of First Solar's Q1 2026 earnings report, due after today's close. The stock climbed +5.5% to $201.07, snapping back from yesterday's cautious -2.68% slide. But the rally carries a tension: the company has missed consensus estimates in three of the last four quarters , and tonight's results will test whether this time is different.

Wall Street Expects a Big Profit Jump — With Reasons to Doubt It

Analysts expect First Solar to report $2.86 per share, up 46.7% from $1.95 in the year-ago quarter.

Revenue estimates sit near $1.05 billion, reflecting a 24.3% year-over-year increase. Those are strong numbers — but the company delivered a negative earnings surprise of 7.3% just last quarter , when it reported $4.84 versus the expected $5.22. That miss triggered a 19.8% selloff over three days. The pattern makes today's pre-earnings optimism a gamble.

Tax Credits Are Doing the Heavy Lifting on Margins

First Solar's profitability is expected to lean heavily on Section 45X manufacturing tax credits — government payments for domestic production — with management guiding Q1 adjusted EBITDA (a measure of operating profit) to $400–$500 million, supported by $330–$400 million in tax credits alone. That means the vast majority of operating earnings depend on a policy that could change. For shareholders, earnings quality matters as much as the headline number.

Overseas Factories Are Running on Fumes

First Solar's Southeast Asia plants in Malaysia and Vietnam are intentionally running at very low utilization due to weak demand and tariff uncertainty, resulting in underutilization costs that pressure margins. Meanwhile, tariffs on imported materials are expected to add $155–$175 million in costs for the full year , eating into any revenue gains.

Analysts Still See Upside — But They've Been Cutting Targets

The average analyst price target sits at $243.49, a "Moderate Buy" consensus — implying roughly 21% upside from today's price. Yet the recent trend is downward: Citi cut its target from $300 to $243, while Barclays dropped to $213 from $228 . The stock trades at just 13.9x trailing earnings, cheap for a company expected to grow full-year EPS 22.5% to $17.40 . That discount reflects real skepticism about execution. Tonight's call — particularly any update on 2026 revenue guidance of $4.9–$5.2 billion — will determine whether the bargain is justified or a trap.