LOS ANGELES - Shares in First Solar Inc,, one of the early stars of the emerging solar power sector, have had a choppy ride lately, raising a question for investors: Is it a tech play or something more down-to-earth?

Investors should place First Solar among industrial companies that see slower, steady growth rather than in the realm of high-flying technology players like Apple Inc and Google Inc., some analysts say.

First Solar, which went public in 2006, drew investors on ecstatic hopes that its thin film technology would fuel growth in clean technology and renewable energy.

But shares of the Tempe, Arizona-based company have fallen -- along with some of its peers' -- to end 2009 down more than 50 percent from a peak in May 2008.

That means First Solar's price to earnings ratio once soared above even the typical techs, but now is down at industrial levels.

The tech sector typically has a price-to-earnings ratio of about 24 while industrial companies see a ratio of about 16. Fast-growing companies get higher ratios as investors bet future performance will improve.

In its first year of public trade, shares of First Solar enjoyed ratios in the hundreds. In 2009, its ratio hit a high of 47.7 and saw an average of 30. But the company started 2010 with a price to earnings ratio of 18.

For J.P. Morgan analyst Christopher Blansett, First Solar is more of an industrial company than a traditional tech player like Intel.

It doesn't subscribe in any way, shape or form to Moore's Law type of characteristics, Blansett added, referring to the semiconductor industry's guideline that the number of transistors on a chip will double about every two years.

It's large, large-scale manufacturing and very low-cost stuff, Blansett said.

Blansett adds a premium to First Solar because of its high profile green status and because of strong government supports fueling growth in the sector.

That brings his target for the shares -- a price of $140 each based on a multiple of 22.5 times his estimate of $6.30 earnings per share in 2010 -- in line with others who view it as a tech play.

Over time, Blansett said, the solar sector will become commoditized and investors will increasingly evaluate First Solar as an industrial play, lowering its multiple to that sector's range.

MORE ADVANCES TO COME

Some analysts do hold that First Solar is a tech company.

Much of the company's popularity stems from its unique technology: Its cadmium telluride-based thin film solar panels are cheaper to make than traditional silicon-based panels.

First Solar has driven down its production costs to be the lowest in the industry and has become an industry bellwether, setting the pace for the renewable energy sector.

To say that they're an industrial company -- that's not true because they are still going through phases of technology enhancements, Pacific Crest Securities analyst Mark Bachman said in an interview.

Bachman said First Solar has room to improve how efficiently its solar panels convert sunlight to electricity, which could take its technology and growth to new heights.

He also cited First Solar's advances to replicate its factories with the same toolset, layout and recipe of cadmium telluride and to cut the overall cost of solar power systems.

First Solar could return to previous growth rates depending on how much it expands production capacity and on government aid to the sector, Bachman said.

The analyst believes the company's shares are fairly valued at a price of $140 each based on 20 times earnings. Longer-term investors who look a year ahead can target a higher share price of $160 each, based on 20 times estimated earnings per share in 2011, Bachman added.

In 2010, First Solar expects to see a greater mix of revenue from building solar power systems and its core business of making solar power panels.

The systems business brings much lower profit margins than its module sales, but the strategy is meant to grow the overall market and spur future sales. Other solar players, such as SunPower Corp, also develop solar power systems.

For Kaufman Brothers analyst Theodore O'Neill, First Solar's panels are a commodity.

O'Neill bases his $86 price target on a multiple of 14 times his estimate of $6.00 earnings per share in 2010.

I'm expecting, over time, that the pricing will become whatever the pricing is for those two sheets of glass that they put around the panels and the metal trim that goes around the whole thing, O'Neill said.

There won't be any real cost for that stuff that's in the middle, O'Neill added.

(Reporting by Laura Isensee; additional reporting by David Gaffen and Christopher Sanders in New York; Editing by Gary Hill and Gunna Dickson)

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