First Solar or Nextracker? Uncovering the Smarter Solar Investment Play

As clean energy investments continue to escalate worldwide, solar power has emerged as the fastest-growing energy source, brightening the growth prospects for key industry players like First Solar FSLR and Nextracker Inc. NXT. With increasing investor interest in green energy, these two solar giants offer compelling yet contrasting opportunities worth exploring.While First Solar specializes in manufacturing advanced thin-film photovoltaic (PV) solar modules and focuses on deploying utility-scale solar projects, Nextracker provides solar tracker technologies, solutions for utility-scale and distributed generation solar applications.As global solar power generation has doubled in the past three years, investors are attracted to solar stocks. However, they may find it challenging to choose between these two promising solar players. Let’s do a comparative analysis to help them make an informed decision.Financial Stability & Future Growth Drivers: FSLR vs NXTAt the end of March 31, 2025, First Solar’s cash and cash equivalents were $891 million. Its long-term debt as of the same date totaled $328 million and the current debt level was $197 million. So, we may safely conclude that First Solar boasts a strong solvency position. This, in turn, should enable FSLR to meet its investment target of $1.0-$1.5 billion in building new manufacturing facilities, expanding the existing ones, as well as upgrading machinery and equipment. Such a robust capital expenditure plan can be expected to allow the company to meet its targeted manufacturing capacity enhancement.As of March 31, 2025, NXT’s cash and cash equivalents were $766 million. The company did not report any notable debt as of March 2025, indicating a solid financial footing. This strong liquidity position should support the continued upgradation of its solar trackers along with its operational and growth-related activities in the near future.From the perspective of future growth drivers, the solar energy market is showing enhanced demand, supported by favorable government policies, declining technology costs and greater awareness of clean energy. Its strong potential and alignment with global sustainability goals make it an attractive area for continued investment and development. This trend is likely to benefit both FSLR and NXT.First Solar’s total installed nameplate production capacity across all its facilities was approximately 21 gigawatts (GW) as of March 31, 2025, and it expects to have an annual manufacturing capacity of more than 25 GW by the end of 2026. Such a solid manufacturing enhancement strategy should attract more customers, thereby boosting its revenue stream. As of March 31, 2025, First Solar entered into contracts with customers for the future sale of 66.1 GW of solar modules for an aggregate transaction price of $19.8 billion, which it expects to recognize as revenues through 2030.In June 2025, Nextracker’s NX Horizon solar trackers were chosen for the 550 MW “Oricheio PPC Ptolemaida” solar park in Western Macedonia, one of Europe’s largest solar firms. A month earlier, Nextracker surpassed 10 GW of tracker deployments in India—a major milestone—and announced plans for a new 80,000 sq. ft. office and R&D facility in Hyderabad to support further expansion. Also in May, the company acquired US-based Bentek Corporation for $78 million. The acquisition aims to enhance Nextracker’s domestic supply chain, simplify project logistics and accelerate solar plant construction through integrated and standalone eBOS solutions. These announcements underscore Nextracker’s commitment to global expansion and are poised to serve as key growth catalysts in strengthening its position in the solar market.Risks of Investing in FSLR and NXTBoth Nextracker and First Solar are facing challenges due to recent changes in U.S. trade policy. In April 2025, a new 10% base tariff was introduced on most imports, including from countries like India, Vietnam and Malaysia—where First Solar manufactures some of its modules. Such higher tariffs bear every possibility of increasing production costs and affect FSLR’s ability to supply the U.S. market.Nextracker may also experience higher costs due to tariffs imposed on imported steel and solar components. In addition, steep tariffs on Chinese products—some as high as 145%—remain in place, which may also push up manufacturing expenses for NXT.First Solar is also facing technical issues with some Series 7 modules made in 2023 and 2024, which may result in early power loss in the field. The company expects losses related to this issue to be between $56 million and $100 million, which could weigh on its near-term operating results.How Does the Zacks Estimate Compare for FSLR & NXT?The Zacks Consensus Estimate for FSLR’s 2025 sales implies a year-over-year rise of 16.3%, and the same for its earnings implies growth of 20.6%. The consensus estimates for 2026 also reflect an improvement. However, the stock’s near-term bottom-line estimates have moved south over the past 60 days.Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for NXT’s fiscal 2026 sales implies a year-over-year rise of 12.6%, while the same for its earnings suggests a decline of 8.3%. The consensus estimate for fiscal 2027 reflects an improvement on both counts. The stock’s near-term bottom-line estimates have moved north over the past 60 days.Image Source: Zacks Investment ResearchStock Price Performance: FSLR vs NXTNXT (up 38.4%) has outperformed FSLR (up 20.3%) over the past three months and it has done the same in the past year as well. While NXT’s shares have gained 26.5%, FSLR plunged 31.6%.Image Source: Zacks Investment ResearchValuation of FSLR More Attractive Than NXTFirst Solar is trading at a forward earnings multiple of 8.32X, below its median of 9.42X over the past year and Nextracker’s forward earnings multiple of 14.55X.Image Source: Zacks Investment ResearchConclusionBoth First Solar and Nextracker stand out as promising players in the fast-growing solar sector, backed by strong financials and ambitious growth plans.First Solar offers greater visibility with its long-term contracts, aggressive capacity expansion and more attractive valuation, making it a solid choice for value-focused investors. However, the downward trend in its near-term estimate revisions signals some caution.Nextracker, on the other hand, is gaining momentum through global project wins and strategic acquisitions, with strong stock performance reflecting investor optimism. Its earnings estimates, while showing a short-term dip, have been revised upward recently, suggesting improving analysts’ sentiment in this stock.Ultimately, while FSLR may appeal to those seeking long-term returns, NXT offers dynamic growth potential, making it the better solar player for the moment, largely dependent on an investor’s risk appetite and investment horizon.Both FSLR and NXT currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First Solar, Inc. (FSLR): Free Stock Analysis Report Nextracker Inc. (NXT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks