Why First Solar (Nasdaq: FSLR) Stock Is Up 21% Today, and Where It's Headed Now

Shares of First Solar Inc. (Nasdaq: FSLR) are up more than 17% today (Wednesday) after the company released its guidance figures for 2014, 2015, and 2016 at its annual "Analyst Day" meeting.

Nasdaq: FSLRFirst Solar expects full-year revenue in 2014 between $3.7 billion and $4 billion, and earnings per share (EPS) between $2.20 and $2.60. This time last year, the company had projected EPS between $2.50 and $4 for 2014.

For 2015, the company expects revenue between $3.8 billion and $4.3 billion, which is on the low end of analysts' estimates of $4.24 billion. FSLR projects 2015 EPS between $4.50 and $4.60, which is above the consensus estimate of $3.82.

The real growth is in First Solar's 2016 guidance figures with a revenue range of $3.8 billion to $4.5 billion, up from a consensus projection of $3.87 billion.

FSLR stock traded as high as $70.99 today, following the guidance announcement. That was the highest share price for FSLR since September 2011.

Today's stock surge shouldn't be completely attributed to guidance figures, however. There were other factors sending FSLR higher...

Other Factors Lifting First Solar (Nasdaq: FSLR) Stock

First Solar also announced that it has partnered with General Electric Co. (NYSE: GE). The two companies will be developing a utility-sized solar power plant design that will combine FSLR's solar modules and GE's transformer systems.

In today's announcement, the company described the partnership as a "significant step in establishing the next generation" of utility-scale solar power plants.

Earlier in the week, First Solar announced a 20-year power purchase agreement with the country of Jordan. FSLR will be constructing a 53-megawatt solar power plant in Jordan that will account for approximately 1% of the country's total electricity generation.

First Solar focuses primarily on utility-sized solar projects. That separates it from some of its biggest competitors like SolarCity Corp. (Nasdaq: SCTY), which works mostly with residential power.

That's what makes this week's news even more encouraging. First Solar continues to solidify itself as a force in the utility-sized solar power market.

Following the spate of good news, here's what investors should do with FSLR stock now.

How to Play First Solar (Nasdaq: FSLR) Stock Today

At the end of February, FSLR reported Q4 earnings, and shareholders were disappointed. Shares dipped more than 12% after earnings missed estimates by $0.10.

While the stock dropped, there were encouraging signs in the report.

FSLR reported cutting manufacturing costs by 17% on its modules from $0.64 per watt in 2012 to $0.53 in 2013. The company also added bookings of 1.7 gigawatts in solar projects in 2013.

At the same time, the company announced that it had created the highest-performing solar module among companies using CdTe (cadmium-telluride) technology. If that wasn't enough, First Solar announced that its plant in Dubai had become the largest photovoltaic (PV) plant in the Middle East.

The stock traded down slightly in the following weeks, but has jumped nearly 29% in the past five days.

In the most recent survey conducted by Thompson/First Call, two analysts rated FSLR as a "Strong Buy," one as a "Buy," 13 as a "Hold," three as an "Underperform," and one as a "Sell."

Baird was one of the only firms to upgrade FSLR stock recently, from "Neutral" to "Outperform," citing the company's size in the utility-solar industry as a main factor. However, that recommendation came at the end of February with a price target of $67.

With FSLR trading over $70 today, the stock is priced too high to buy in now, especially with 2014 guidance figures coming in lower than expected. Those that bought in following last month's dip banked gains of nearly 30%, but buying in on today's highs is the wrong move.

Holding FSLR stock is the best play at the moment.

Do you own FSLR stock or any other solar stocks? Join the conversation on Twitter @moneymorning using #Solar.

After reading this, you'll be laughing at investors who are worried about the next market sell-off. Start profiting today...

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