Critical Review: First Solar (NASDAQ:FSLR) vs. Nova (NASDAQ:NVMI)

Nova (NASDAQ:NVMI) and First Solar (NASDAQ:FSLR) are both technology companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitability, dividends, earnings and analyst recommendations.

Risk & Volatility

Nova has a beta of 1.79, indicating that its share price is 79% more volatile than the S&P 500. Comparatively, First Solar has a beta of 1.8, indicating that its share price is 80% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Nova and First Solar, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nova	0	4	7	0	2.64
First Solar	2	10	23	2	2.68

Nova currently has a consensus price target of $499.44, suggesting a potential upside of 57.89%. First Solar has a consensus price target of $265.73, suggesting a potential upside of 58.03%. Given First Solar’s stronger consensus rating and higher probable upside, analysts clearly believe First Solar is more favorable than Nova.

Insider and Institutional Ownership

83.0% of Nova shares are owned by institutional investors. Comparatively, 92.1% of First Solar shares are owned by institutional investors. 1.0% of Nova shares are owned by insiders. Comparatively, 0.4% of First Solar shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Nova and First Solar”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nova	$880.58 million	11.42	$259.22 million	$8.08	39.15
First Solar	$5.22 billion	3.46	$1.53 billion	$16.22	10.37

First Solar has higher revenue and earnings than Nova. First Solar is trading at a lower price-to-earnings ratio than Nova, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Nova and First Solar’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nova	28.84%	21.41%	11.95%
First Solar	32.47%	18.02%	13.05%

Summary

First Solar beats Nova on 11 of the 15 factors compared between the two stocks.

About Nova

Nova Ltd. designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel, Taiwan, the United States, China, Korea, and internationally. Its product portfolio includes a set of metrology platforms for dimensional, films, and materials and chemical metrology measurements for process control for various semiconductor manufacturing process steps, including lithography, etch, chemical mechanical planarization, deposition, electrochemical plating, and advanced packaging. The company serves various sectors of the integrated circuit manufacturing industry, including logic, foundries, and memory manufacturers, as well as process equipment manufacturers. Nova Ltd. was formerly known as Nova Measuring Instruments Ltd. and changed its name to Nova Ltd. in July 2021. Nova Ltd. was incorporated in 1993 and is headquartered in Rehovot, Israel.

About First Solar

First Solar, Inc., a solar technology company, provides photovoltaic (PV) solar energy solutions in the United States, France, Japan, Chile, and internationally. The company manufactures and sells PV solar modules with a thin film semiconductor technology that provides a lower-carbon alternative to conventional crystalline silicon PV solar modules. It designs, manufactures, and sells cadmium telluride solar modules that converts sunlight into electricity. The company's residual business operations include project development activities, operations and maintenance services, and the sale of PV solar power systems to third-party customers. It serves developers and operators of systems, utilities, independent power producers, commercial and industrial companies, and other system owners. The company was formerly known as First Solar Holdings, Inc. and changed its name to First Solar, Inc. in 2006. First Solar, Inc. was founded in 1999 and is headquartered in Tempe, Arizona.