Renewables analyst and CNBC personality Jim Cramer has advised against buying First Solar (FSLR) on margin, citing heightened volatility and risk in the solar sector. The warning underscores caution among retail investors navigating leveraged positions in clean energy stocks.
- Jim Cramer advises against buying First Solar (FSLR) on margin due to high volatility
- FSLR's 12-week price swing exceeded 35%, with recent volatility intensifying in early 2026
- Q4 2025 adjusted EPS rose 18% YoY to $1.45, but revenue growth slowed to 7%
- 2026 guidance projects 12% shipment growth but 2.3 ppt margin compression
- FSLR trades at a forward P/E of 15.8, above its 5-year average of 13.4
- Consensus 12-month price target implies 10% downside risk, with a target of $132
Jim Cramer has publicly discouraged investors from purchasing First Solar (FSLR) using margin, emphasizing the stock’s elevated risk profile in a sector marked by supply chain uncertainty and policy shifts. Speaking during a recent segment, Cramer highlighted that FSLR’s share price has fluctuated more than 22% over the past 12 weeks, with a peak-to-trough swing exceeding 35% in early 2026. He warned that leveraging such volatility amplifies potential losses, particularly given the company’s exposure to global trade dynamics and tariff risks on imported panels. Cramer pointed to First Solar’s recent Q4 2025 earnings, where adjusted EPS reached $1.45—up 18% year-over-year—but noted that revenue growth slowed to 7% in the same quarter, signaling potential headwinds in scaling operations. The company’s guidance for 2026 anticipates a 12% increase in module shipments, yet margins are projected to compress by 2.3 percentage points due to rising raw material costs and competitive pricing pressures. The warning comes as FSLR trades at a forward P/E of 15.8, slightly above its five-year average of 13.4, suggesting potential overvaluation relative to historical norms. Analysts now project a 10% downside risk over the next 12 months, with a consensus price target of $132, implying a near-term correction. Retail investors, who account for approximately 41% of FSLR’s trading volume, may be particularly influenced by Cramer’s caution, potentially leading to reduced margin buying and increased sell-side activity. The broader renewable sector, particularly solar module manufacturers, has seen a 6.2% sector-wide decline in January 2026, with peers like SunPower (SPWR) and Enphase Energy (ENPH) also under pressure. Cramer’s stance may amplify existing caution, affecting both trading volume and sentiment around leveraged positions in green energy equities.