Forget First Solar, try 5N Plus, analyst says

Ventum Capital Markets analyst Amr Ezzat is maintaining his “Buy” rating on 5N Plus (5N Plus Stock Quote, Chart, News, Analysts, Financials TSXV:VNP) with a price target of C$10.00.

Ezzat reasons that the U.S. government’s newly finalized tariffs on crystalline silicon (C-Si) solar modules imported from Vietnam, Malaysia, Thailand and Cambodia will open up some market for 5N Plus. These measures are aimed at curbing Chinese solar manufacturers like LONGi, Trina and JinkoSolar, which have shifted production to those countries to bypass earlier trade restrictions.

While First Solar, known for its U.S.-based production using cadmium telluride (CdTe) thin-film technology, is seen as a clear beneficiary, Ezzat says the bigger opportunity lies with 5N Plus. As First Solar’s exclusive U.S. supplier of CdTe, 5N Plus stands to gain meaningfully from the shift in demand toward tariff-exempt, domestically produced solar modules.

“If First Solar gains share, demand for 5N’s materials could rise structurally,” Ezzat said in an April 22 corporate update. “This isn’t a one-off catalyst – it’s a long-term regulatory reinforcement of a reshoring trend already in motion. 5N’s CdTe volumes have already tripled since 2021 and are contractually set to grow another 50% by 2026. Today’s tariff decision could accelerate that trajectory.”

As First Solar undertakes its largest U.S. expansion to date, Ezzat sees 5N becoming even more entrenched as a “mission-critical partner,” with exclusivity that reinforces pricing power and aligns with U.S. efforts to localize solar supply chains. “CdTe may only account for about five percent of a module’s bill of materials, but it’s the irreplaceable five percent,” he said.

On a broader scale, Ezzat frames the company’s advantage within geopolitical trends, noting that “5N emerges as the only credible non-China-based provider of ultra-high purity semiconductor materials.” With growing global focus on diversifying semiconductor supply chains, he says 5N is uniquely positioned to benefit from Western reshoring initiatives. “The company has already flagged discussions with a strategic client about incremental volumes, and today’s tariff decision adds urgency to those talks,” Ezzat said.

Ventum expects VNP will generate US$58.4-million in adjusted EBITDA on US$330.5-million in revenue for fiscal 2025. Ezzat forecasts those numbers will improve to US$68.4 million in adjusted EBITDA on US$370.7 million in revenue for fiscal 2026.

“The market’s underestimation of growth catalysts in specialty semiconductor and renewable energy applications presents a compelling case for multiple expansion as investors recognize the Company’s direct alignment with surging demand in advanced materials for clean energy and advanced tech applications,” Ezzat said. “Given the company’s positioning in these high-growth markets and its potential to capture outsized growth relative to peers, we don’t think it’s inconceivable for the market to assign a premium to 5N Plus amid continued secular tailwinds.”