Contracts are firm. The only way they don't get money for delivery of
the panels is if they don't deliver the panels. Customers are
obligated to pay as long as the delivery is within timeframe and
overall efficiency meets a minimum standard, which has not been a
problem or likely to be one.
FSLR has their own proprietary technology and machines - they do not
use AMAT machines or any stock chip making gear. They have elected to
not file patents and go with trade secrets instead for the process.
So I can't really answer too much as to the technology and the R&D and
how that compares to another company with a different tech. When FSLR
IPO'd they had a run rate of 25Mw per line. It's around 45Mw per line
per year now. FSLR is downright tightlipped about many aspects of
their process and what the immediate future plans are. Look at the
recent solar plant announcements that they've kept under wraps as long
as possible instead of trumpeting it as soon as possible. They had a
long time to work on their tech without a demand for a specific return
on capital invested by their equity investors as they had patient
money (Walton of WalMart), which I would imagine is not the case for
many of these other startups.
As for competing at the R&D level for a forward p/e of 40? They
produce their cells for $1.14/watt, which is the lowest cost per watt,
and this is lower than the price they had at IPO (I can't remember
offhand), but they've continuously brought it down at a decent rate.
Until another company can prove its claims there is no reason to leave
this one. You'll have enough time to see the other actually work and
prove it before you have to leave. It's not like FSLR is going to not
have revenue and earnings in the meantime while the other, if it does,
comes along.
And again, the forward p/e is in the 40's only so long as the
estimates are correct for next year. If it's $7 or more, as I believe
its going to be, then you're looking at a p/e in the upper 30's.
Analysts have not once been at or in front of the earnings for this
company. I see the next few qtrs at least continuing the same. 90
days ago the estimate for next year was $5.11 now its $5.84. Energy
is a trillion dollar market. It's not like the internet where they
had to create new markets and were valued on 'eyeballs per page' and
other nonsense ratios. One can legitimately argue over the correct p/
e level for FSLR, but a) it has one, and b) it is not at all the same
as the internet boom/crash. Whatever the stock price does their
revenue is going to keep pumping along. The problem with the internet
was that after a bit everyone realized that all these eyeballs were
great, but there wasn't any revenue and it wasn't growing at a fast
enough pace to justify the valuation levels.
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