Using an unlevered Free Cash Flow to Firm (FCFF) model, we project First Solar, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -0.9% to -2.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 101, DPO 48, DIO 146). At a 7.7% WACC with mid-year discounting, the terminal value (104% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $233.48 per share, suggesting FSLR is undervalued by 24.7% at the current price of $187.21.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 1,042 | 1,220 | 1,347 | 1,473 | 1,431 | 1,467 |
| (−) Net Interest | 32 | 37 | 41 | 45 | 44 | 45 |
| (+) D&A | 1,045 | 1,243 | 1,420 | 1,537 | 1,664 | 1,705 |
| EBITDA | 2,119 | 2,500 | 2,807 | 3,055 | 3,138 | 3,217 |
| (−) Tax | 521 | 610 | 673 | 737 | 716 | — |
| (−) CapEx | 1,527 | 1,789 | 1,974 | 2,159 | 2,097 | — |
| (−) ΔWC | 773 | 410 | 290 | 291 | -97 | — |
| Free Cash Flow (FCF) | -702 | -309 | -130 | -131 | 422 | — |
| Peers' EBITDA Multiple | 10.6x | |||||
| Terminal Value | 34,227 | |||||
| WACC / Discount Rate | 7.67% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -676 | -276 | -108 | -101 | 303 | 23,656 |
| Enterprise Value | 22,797 | |||||
| Projection Period | -859 | -3.8% | ||||
| Terminal Value | 23,656 | 103.8% | ||||
| (−) Current Net Debt | (2,305) | |||||
| Equity Value | 25,102 | |||||
| (÷) Outstanding Shares | 108M | |||||
| Fair Price | $233 | +24.7% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.6x | 8.6x | 10.6x | 12.6x | 14.6x |
|---|---|---|---|---|---|
| 5.7% | $164 | $210 | $255 | $301 | $346 |
| 6.7% | $157 | $201 | $244 | $287 | $331 |
| 7.7% | $151 | $192 | $233 | $275 | $316 |
| 8.7% | $145 | $184 | $224 | $263 | $303 |
| 9.7% | $139 | $176 | $214 | $252 | $290 |
Current price: $187.21. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.