Cramer: Why this stock is getting 'hammered'

CNBC's Jim Cramer sees a big difference between two similar solar energy companies, and he advised investors to heed his observations.

One company, SolarCity, remains a "must buy" for growth managers because of its association with Tesla Motors founder Elon Musk, he said. SolarCity stock exploded 389 percent in the past year, reaching an all-time high Wednesday morning.

The other, First Solar, reported weaker-than-expected earnings Tuesday and projected lower revenue forecasts, sending the stock about 10 percent lower when trading opened Wednesday.

"It's a good company, but you know what, you have to produce," Cramer said Wednesday on "Squawk on the Street."

(Read more: What's making Jim Cramer nervous about stocks)

Cramer said that's because First Solar seems on its way to becoming a more mature company compared with SolarCity, whose appeal lies in its growth potential rather than traditional metrics.

(Read more: Cramer: Don't worry, be happy, buy SolarCity)

"I find this [is] one of the signs of what you have to be careful for when you have a junior growth stock become a senior growth stock," Cramer said. "When you actually have metrics you must beat, First Solar didn't beat them, and the stock got hammered."

Disclosure: Cramer's charitable trust does not own SolarCity or First Solar stock.

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street."


Contact Stocks


    Get the best of CNBC in your inbox

    To learn more about how we use your information,
    please read our Privacy Policy.
    › Learn More