First Solar’s ( FSLR ) stock saw some very enthusiastic buying earlier this week as its shares jumped nearly 15% from $140 at the close of trading last Friday to almost $160 on Monday. A similar trend was witnessed in the prices of almost all its competitors in the solar industry, which includes SunPower ( SPWRA ), Suntech Power ( STP ) and Yingli Green Energy Holding Com ( YGE ).

Our price estimate for First Solar’s stock is at $155 , which in line with its current market price.

First Solar is engaged in the manufacturing and sale of solar power modules with an advanced thin film semiconductor technology. The firm also designs, constructs and sells photovoltaic (PV) solar power systems to customers around the world and was the biggest producer of PV modules in 2008 and 2009 with annual sales of about 1.1 gigawatt ( GW ) in each of those years. Although its sales figure increased by almost 30% to reach 1.4 GW in 2010, it is currently ranked second in the world in PV module production and was passed by the China-based solar industry giant Suntech Power to the top spot.

First Solar’s competitive strength in the solar industry has been its ability to manufacture PV systems at costs lower than any other company. The first company to reduce per watt manufacturing costs to below $1, First Solar currently builds systems at around 75¢ per watt and would likely reach costs below 60¢ per watt by 2014. This single factor would ensure profitability for the company in the years to come, as revenue per watt sold is continuously being driven down given the extremely competitive environment.

source: community.nasdaq