The solar market is on an upward trajectory. The industry is anticipated to see a compound annual growth rate of roughly 22% through 2029. Array Technologies (NASDAQ:ARRY) is riding the wave and is in a prime position to benefit from this growth. While the stock has shed nearly 16% of its value year-to-date, a recent revenue beat and robust pipeline suggest a potential turnaround. ARRY shares trade at a discount, making this a compelling opportunity for value investors interested in participating in the solar market upswing.
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Array Technologies’ Focus on Expansion
Array Technologies is a leading global provider of utility-grade solar tracker technology, premium solar trackers, and advanced software designed to amplify energy production and foster the adoption of economical and sustainable energy.
Array enjoys a global reputation for enhancing the efficiency of solar panels through its utility-scale solar tracking technology. Its patented tracker technology claims to boost energy production by 25% with only a minimal cost increase ($0.045/W DC).
Recently, the company made headlines by breaking ground on a $50+ million manufacturing campus in Bernalillo County, New Mexico. The new 216,000-square-foot facility in Albuquerque is projected to provide over 300 jobs in the short term, aiding in the manufacturing, assembly, design, engineering, and customer service of solar tracking technology.
Array’s Recent Financials and Outlook
Array Technologies recently announced its first-quarter financial results for 2024. The company opened the year with significant momentum, generating approximately $400 million in new bookings within the first quarter. It posted revenue of $153.4 million, comfortably outperforming the projected figure of $140.11 million. However, the net loss for the period was $11.3 million, exceeding the estimated loss of $3.72 million. The basic and diluted net loss per share stood at $0.07, missing expectations for a loss per share of $0.03.
Cumulative bookings over the past four quarters amounted to $1.8 billion, bringing the order book to a robust $2.1 billion, and management has given guidance that momentum will continue into 2024. The second quarter revenue is expected to hover between $225 and $235 million, while the yearly revenue is projected in the range of $1.25 billion to $1.40 billion.
The full-year adjusted EBITDA is estimated in the range of $285 million to $315 million. The adjusted net income per share is expected to be between $1.00 and $1.15, with a gross margin in the low-thirties percent of sales for the year, attributable to their structural cost enhancements.
Is ARRY Stock a Buy?
Analysts following Array Technologies have been cautiously optimistic about the stock. For example, Northland analyst Donovan Schafer recently lowered the share price target from $22 to $20 while maintaining an Outperform rating. Schafer mentioned the company’s Q1 revenue beat and a backlog of $400 million net new orders, noting that increased competition could impact the company’s margins.
Array Technologies is rated a Moderated Buy based on the ratings and price targets issued by 19 Wall Street analysts over the past three months. The average price target for ARRY stock is $19.64, representing an upside of 38.50% from current levels.
The stock has been highly volatile, though it has shown some upside, climbing 6.46% in the past 90 days. Shares trade at the lower end of the 52-week price range of $10.60-$26.64 and demonstrate ongoing positive price momentum, trading above the 20-day (12.91) and 50-day (12.96) moving averages.
The company’s current enterprise value (EV) to EBITDA ratio of 12.14 suggests it is trading at a discount to its historical average of 394.11 and to its peers in the Solar industry, where the average EV/EBITDA is 19.94.
Final Analysis on Array
Array Technologies is primed to continue its upward momentum. Recent revenue beat and promising pipeline indicate a positive trajectory, as does the rising tide of the surging solar market. Shares trade at a discount, offering compelling value for investors seeking to capitalize on the opportunity.
