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Shoals Technologies Group (SHLS)
NASDAQ:SHLS
US Market

Shoals Technologies Group (SHLS) AI Stock Analysis

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Shoals Technologies Group

(NASDAQ:SHLS)

63Neutral
Shoals Technologies Group presents strong financial performance with solid revenue growth and cash flow generation. However, the stock is technically weak with bearish momentum, and valuation is moderate. The optimistic outlook for 2025 and strategic focus on market expansion are positive, yet challenges remain with past revenue decline and ongoing litigation.
Positive Factors
Growth Potential
There is potential for growth in international, commercial & industrial, and battery energy storage systems.
Negative Factors
Competition Impact
Competitive pressures dragged on GM% in 4Q, implying lower ASPs, giving credence to bear thesis that Voltage/other EBOS competitors are driving pricing lower.
Litigation Risks
Ongoing litigation, particularly with Voltage and Prysmian, poses a challenge for the company.

Shoals Technologies Group (SHLS) vs. S&P 500 (SPY)

Shoals Technologies Group Business Overview & Revenue Model

Company DescriptionShoals Technologies Group Inc is a provider of electrical balance of system or "EBOS" solutions for solar energy projects in the United States. The products are sold principally to EPCs that build solar energy projects.
How the Company Makes MoneyShoals Technologies Group makes money primarily through the sale of its EBOS components and solutions to solar project developers, engineering procurement and construction firms, and independent power producers. The company's revenue model is centered around providing high-quality, cost-effective solutions that enhance the efficiency of solar power systems. Key revenue streams include direct sales of EBOS components, such as junction boxes and wire harnesses, and the provision of comprehensive system design services that help customers optimize their solar installations. Additionally, Shoals benefits from long-term relationships with major players in the solar industry, which can lead to repeat business and stable revenue growth.

Shoals Technologies Group Financial Statement Overview

Summary
Shoals Technologies Group shows strong revenue growth and improving balance sheet metrics. The cash flow is robust, supporting financial stability, though margin efficiency needs attention and debt levels must be managed carefully.
Income Statement
78
Positive
Shoals Technologies Group has demonstrated consistent revenue growth over the years, with an increase from $175.52M in 2020 to $399.21M in 2024. Gross profit margins have remained strong, indicating efficient cost management. However, there was a decline in EBIT and EBITDA margins in 2024, suggesting increased operating expenses or reduced operational efficiency.
Balance Sheet
72
Positive
The company's debt-to-equity ratio has improved significantly as equity has grown over the years, reducing financial leverage risks. In 2024, the equity ratio was healthy, reflecting a strong asset base versus liabilities. However, the company has carried substantial debt historically, which could pose risks if not managed carefully.
Cash Flow
80
Positive
The operating cash flow has been positive and growing, indicating robust cash-generating capabilities. The company has managed to maintain positive free cash flow, supporting reinvestment and financial stability. The free cash flow to net income ratio is strong, reflecting efficient cash conversion.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
399.21M488.94M326.94M213.21M175.52M
Gross Profit
142.02M168.30M131.31M82.64M66.55M
EBIT
51.17M79.03M170.54M36.23M37.28M
EBITDA
64.32M89.56M181.05M48.63M46.68M
Net Income Common Stockholders
24.13M39.97M127.61M3.94M33.77M
Balance SheetCash, Cash Equivalents and Short-Term Investments
23.51M22.71M8.77M5.01M10.07M
Total Assets
793.08M843.99M594.89M426.41M195.31M
Total Debt
141.75M184.70M239.06M247.05M358.83M
Net Debt
118.24M161.99M230.30M242.05M348.76M
Total Liabilities
236.28M299.00M293.91M433.91M379.43M
Stockholders Equity
556.80M545.00M291.37M2.55M-184.12M
Cash FlowFree Cash Flow
72.00M81.38M36.30M-8.21M50.85M
Operating Cash Flow
80.39M91.95M39.45M-4.08M54.08M
Investing Cash Flow
-8.39M-10.85M-3.66M-17.04M-3.24M
Financing Cash Flow
-71.19M-67.17M-36.59M20.60M-47.85M

Shoals Technologies Group Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.81
Price Trends
50DMA
4.46
Negative
100DMA
4.74
Negative
200DMA
5.45
Negative
Market Momentum
MACD
-0.47
Positive
RSI
32.04
Neutral
STOCH
14.26
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHLS, the sentiment is Negative. The current price of 2.81 is below the 20-day moving average (MA) of 3.60, below the 50-day MA of 4.46, and below the 200-day MA of 5.45, indicating a bearish trend. The MACD of -0.47 indicates Positive momentum. The RSI at 32.04 is Neutral, neither overbought nor oversold. The STOCH value of 14.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SHLS.

Shoals Technologies Group Risk Analysis

Shoals Technologies Group disclosed 39 risk factors in its most recent earnings report. Shoals Technologies Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Shoals Technologies Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
75
Outperform
$14.89B11.5817.62%26.75%55.24%
68
Neutral
$8.06B79.2211.30%-41.92%-76.24%
63
Neutral
$469.26M20.624.38%-18.35%-42.58%
58
Neutral
$21.35B9.96-19.72%2.38%5.03%-22.83%
53
Neutral
$635.94M691.240.03%-21.68%-99.75%
49
Neutral
$953.13M-53.46%-41.91%-459.51%
47
Neutral
$943.46M-116.01%-68.86%-4917.87%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SHLS
Shoals Technologies Group
2.94
-9.05
-75.48%
CSIQ
Canadian Solar
9.47
-10.09
-51.58%
ENPH
Enphase Energy
58.48
-59.69
-50.51%
FSLR
First Solar
136.04
-22.00
-13.92%
SEDG
SolarEdge Technologies
15.81
-52.04
-76.70%
ARRY
Array Technologies
6.03
-5.95
-49.67%

Shoals Technologies Group Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: -37.28% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a cautiously optimistic outlook for 2025 with improvements in bookings and market expansion. However, challenges such as the revenue decline in 2024 and ongoing litigation impact the sentiment. Shoals is focusing on expanding product offerings and market reach, while managing external challenges.
Highlights
Strong Q4 Bookings and Backlog
Shoals Technologies reported Q4 2024 revenue of $107 million, with strong bookings of $145 million, resulting in a backlog and awarded orders (BLAO) of $635 million and a book-to-bill ratio of 1.4.
New Product Introductions and Market Expansion
In 2024, Shoals introduced over a dozen new products, expanded into new market segments like CC&I and BESS, and won projects in international markets including Australia and Chile.
Positive 2025 Outlook
Shoals Technologies expects 2025 revenue to be between $410 million to $450 million, with adjusted EBITDA between $100 million to $115 million, indicating a recovery and growth from 2024.
Lowlights
Revenue Decline in 2024
Full-year 2024 revenue declined by 18.4% from 2023, largely due to project delays affecting the utility-scale solar industry.
Adjusted Gross Profit Margin Decline
Adjusted gross profit percentage for 2024 was 39%, down from the prior year due to product mix, lower volume, and competitive environment.
Ongoing Litigation Challenges
Shoals is facing ongoing litigation, including an unexpected ITC decision reversal and continued legal expenses related to wire insulation shrinkback.
Company Guidance
In the Shoals Technologies Group Fourth Quarter 2024 Earnings Conference Call, the company reported a revenue of $107 million, hitting the high end of expectations, with strong bookings of $145 million, leading to a total backlog and awarded orders of $635 million and a book-to-bill ratio of 1.4. Adjusted gross profit was noted at 37.6%, slightly below expectations due to competitive pressures and product mix, though productivity improvements offered some offset. The company's long-term goal remains an adjusted gross profit percentage at or above 40%. Adjusted EBITDA stood at $26.4 million, representing 24.7% of revenue. Despite challenges such as project delays and external forces impacting the industry, Shoals Technologies is optimistic about 2025, forecasting full-year revenue between $410 million and $450 million, and adjusted EBITDA between $100 million and $115 million. The company is strategically focusing on market penetration, customer diversification, and new product development to navigate the dynamic landscape and capitalize on the improving outlook for U.S. utility-scale solar.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.