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Shoals Technologies Group (SHLS)
NASDAQ:SHLS
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Shoals Technologies Group
(NASDAQ:SHLS)
63Neutral
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)
Market Cap
$544.40M
Dividend YieldN/A
Average Volume (3M)6.72M
Price to Earnings (P/E)22.9
Beta (1Y)1.06
Revenue Growth-18.35%
EPS Growth-42.58%
CountryUS
Employees1,309
SectorTechnology
Sector Strength53
IndustryRenewable Energy Producers
Share Statistics
EPS (TTM)0.14
Shares Outstanding166,994,670
10 Day Avg. Volume6,986,269
30 Day Avg. Volume6,716,661
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.36
Price to Cash Flow (P/CF)9.70
P/FCF Ratio10.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.53Price Target Upside100.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
Shoals Technologies Group Business Overview & Revenue Model
Company DescriptionShoals Technologies Group (SHLS) is a leading provider of electrical balance of system (EBOS) solutions for solar energy projects. Operating in the renewable energy sector, the company specializes in offering innovative and efficient products that streamline the installation and operational processes of solar power systems. Key products include combiners, inline fuses, disconnects, and wire management solutions, all designed to optimize the performance and reliability of solar installations.
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
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.78
Positive
Balance Sheet
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.72
Positive
Cash Flow
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.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 399.21M | 488.94M | 326.94M | 213.21M | 175.52M | Gross Profit |
| 142.02M | 168.30M | 131.31M | 82.64M | 66.55M | EBIT |
| 51.17M | 79.03M | 170.54M | 36.23M | 37.28M | EBITDA |
| 64.32M | 89.56M | 181.05M | 48.63M | 46.68M | Net Income Common Stockholders |
| 24.13M | 39.97M | 127.61M | 3.94M | 33.77M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 23.51M | 22.71M | 8.77M | 5.01M | 10.07M | Total Assets |
| 793.08M | 843.99M | 594.89M | 426.41M | 195.31M | Total Debt |
| 141.75M | 184.70M | 239.06M | 247.05M | 358.83M | Net Debt |
| 118.24M | 161.99M | 230.30M | 242.05M | 348.76M | Total Liabilities |
| 236.28M | 299.00M | 293.91M | 433.91M | 379.43M | Stockholders Equity |
| 556.80M | 545.00M | 291.37M | 2.55M | -184.12M |
| Cash Flow | Free Cash Flow | |||
| 72.00M | 81.38M | 36.30M | -8.21M | 50.85M | Operating Cash Flow |
| 80.39M | 91.95M | 39.45M | -4.08M | 54.08M | Investing Cash Flow |
| -8.39M | -10.85M | -3.66M | -17.04M | -3.24M | Financing Cash Flow |
| -71.19M | -67.17M | -36.59M | 20.60M | -47.85M |
Shoals Technologies Group Technical Analysis
Negative
3.26
Price Trends
4.36
Negative
4.71
Negative
5.40
Negative
Market Momentum
-0.39
Negative
41.11
Neutral
68.03
Neutral
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 3.26 is below the 20-day moving average (MA) of 3.53, below the 50-day MA of 4.36, and below the 200-day MA of 5.40, indicating a bearish trend. The MACD of -0.39 indicates Negative momentum. The RSI at 41.11 is Neutral, neither overbought nor oversold. The STOCH value of 68.03 is Neutral, 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 | $14.19B | 11.03 | 17.62% | ― | 26.75% | 55.24% | |
68 Neutral | $7.70B | 78.75 | 11.30% | ― | -41.92% | -76.24% | |
63 Neutral | $544.40M | 22.86 | 4.38% | ― | -18.35% | -42.58% | |
58 Neutral | $21.86B | 10.21 | -18.40% | 2.37% | 4.90% | -23.18% | |
53 Neutral | $624.03M | 688.32 | 0.03% | ― | -21.68% | -99.75% | |
49 Neutral | $924.24M | ― | -53.46% | ― | -41.91% | -459.51% | |
47 Neutral | $947.57M | ― | -116.01% | ― | -68.86% | -4917.87% |
* Technology Sector Average
Performance Comparison
SHLS
Shoals Technologies Group
3.26
-8.45
-72.16%
CSIQ
Canadian Solar
9.43
-9.71
-50.73%
ENPH
Enphase Energy
58.13
-53.06
-47.72%
FSLR
First Solar
132.51
-16.97
-11.35%
SEDG
SolarEdge Technologies
16.12
-46.58
-74.29%
ARRY
Array Technologies
6.08
-5.86
-49.08%
Shoals Technologies Group Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -27.23% | 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.