GLW · Forward model · Solar · Bear case
What has to happen in Solar
Model as of
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Solar
Hemlock Semiconductor polysilicon plus Corning's new US solar wafer and module manufacturing, made a reported segment in Q1 2026. Sales grew 90% year over year to $438m and management states a level target of 'more than $3 billion' of revenue with strong profit and cash flow, with no date attached. The basis quarter is depressed by a disclosed extended maintenance shutdown and equipment upgrade at the solar wafer facility that added about $30m of expense and produced a $7m segment net loss.
Latest: $573M (2030Q4E)
| Period | Value |
|---|---|
| 2024Q1 | $216M |
| 2024Q2 | $199M |
| 2024Q3 | $194M |
| 2024Q4 | $256M |
| 2025Q1 | $206M |
| 2025Q2 | $231M |
| 2025Q3 | $319M |
| 2025Q4 | $475M |
| 2026Q1 | $370M |
| 2026Q2 | $438M |
| 2026Q3E | $453M |
| 2026Q4E | $467M |
| 2027Q1E | $479M |
| 2027Q2E | $490M |
| 2027Q3E | $499M |
| 2027Q4E | $508M |
| 2028Q1E | $516M |
| 2028Q2E | $524M |
| 2028Q3E | $530M |
| 2028Q4E | $537M |
| 2029Q1E | $542M |
| 2029Q2E | $547M |
| 2029Q3E | $552M |
| 2029Q4E | $557M |
| 2030Q1E | $561M |
| 2030Q2E | $565M |
| 2030Q3E | $569M |
| 2030Q4E | $573M |
Assumptions & reasoning
- Management's words on the profitability path, quoted whole so the qualifier survives: 'We also expect an improving impact on earnings from Solar starting in Q3 as our ramp continues, building toward a revenue stream of more than $3 billion with strong profit and cash flow.' No date is attached to the $3 billion, so the date in this model is assumed, not disclosed.
- The 16.44% basis EBITDA margin is flattered by depreciation: the segment was pretax NEGATIVE at -5 in the quarter and the positive EBITDA is entirely the $77m depreciation add-back. The margin glide to 28% is therefore a recovery assumption, not an extension of a trend.
- Seasonality was measured and rejected. The arithmetic looks seasonal - a 0.413 signal against a 0.092 largest window spread - but the shape is a plant ramp: sales ran flat near $200m through 2024 then 206, 231, 319, 475, 370, 438. A centred moving average lags an accelerating series, which mechanically inflates the late Q4 ratios, and both Q4 windows sit inside the ramp.
- About 8% of consolidated net income is the Hemlock Semiconductor non-controlling interest and it sits inside this segment. The model values enterprise free cash flow before that minority, so per-share fair value is overstated to the extent the minority keeps growing with the line.