Shoals Technologies Group (SHLS – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Julien Dumoulin Smith from Jefferies maintained a Hold rating on the stock and has a $3.40 price target.
Julien Dumoulin Smith has given his Hold rating due to a combination of factors that present both opportunities and challenges for Shoals Technologies Group. One of the main reasons is the mixed near-term outlook, where a strong backlog supports guidance, but there is a decline in the 2024 backlog and potential risks of project delays. This situation is further complicated by the competitive landscape, with larger peers like Primoris posing a threat domestically.
Another factor influencing the Hold rating is the company’s historical performance in converting backlog and awarded orders into revenue, which has been strong except for 2024. While there is potential for growth in international markets and other sectors, the current policy uncertainties and the need for improved execution remain concerns. Additionally, the valuation has been adjusted downward to reflect these uncertainties, making the stock not as attractive compared to its peers without clearer signs of accelerated backlog growth.
Dumoulin Smith covers the Utilities sector, focusing on stocks such as Hawaiian Electric, Ameren, and Nisource. According to TipRanks, Dumoulin Smith has an average return of 2.4% and a 52.89% success rate on recommended stocks.
In another report released on February 26, Barclays also maintained a Hold rating on the stock with a $4.00 price target.