Trump announces trade deal with EU following months of negotiations
Friday, Seaport Global Securities adjusted its position on Array Technologies (NASDAQ: ARRY), downgrading the stock from Buy to Neutral following the company’s recent financial results and forward guidance. The stock, currently trading at $5.35, has fallen over 50% in the past year and sits near its 52-week low of $5.15. According to InvestingPro analysis, Array Technologies appears undervalued at current levels, though challenges remain. Tom Curran, an analyst at Seaport, provided insight into the decision, noting that Array Technologies has struggled to close the competitive gaps with its leading rival NXT since mid-2023. The company has also faced worsening conditions in Brazil, which is its largest foreign market.
The downgrade comes despite acknowledgment of Array Technologies’ successful efforts in reducing debt and improving its U.S. win rate between Q3 2023 and Q3 2024. Curran remarked on the company’s significant deleveraging and the rebound in its U.S. market performance. Financial data from InvestingPro shows the company maintains a healthy current ratio of 2.28, indicating strong liquidity, while operating with moderate debt levels. However, these positive steps have not translated into the expected business momentum, as evidenced by a significant 41.91% revenue decline in the last twelve months.
Curran expressed that while Array Technologies has implemented various customer initiatives, launched new products, positioned itself strategically in terms of domestic content, and expanded its non-tracker offerings, these actions have not yielded the anticipated results. The analyst’s concerns reflect the challenges Array Technologies faces in a competitive landscape and a difficult international market.
The company’s inability to significantly narrow the share and margin gaps with its main competitor has been a particular point of concern for Seaport Global Securities. Additionally, the deteriorating market conditions in Brazil have compounded the issues for Array Technologies, prompting the firm to reassess its outlook on the stock.
Investors and market watchers will likely monitor how Array Technologies responds to these challenges and whether it can leverage its turnaround strategies to improve performance and regain a competitive edge in the market. While currently unprofitable, analysts tracked by InvestingPro expect the company to return to profitability this year. For now, Seaport Global Securities remains on the sidelines, adopting a wait-and-see approach with the Neutral rating. Discover more insights and 7 additional key tips about Array Technologies with an InvestingPro subscription, including detailed analysis of its financial health and growth prospects.
In other recent news, Array Technologies reported its fourth-quarter 2024 earnings, revealing a slight miss on earnings per share (EPS) compared to market expectations. The company posted an EPS of $0.16, falling short of the anticipated $0.18, while revenue for the quarter reached $275.2 million, slightly exceeding forecasts. Despite a challenging year with a 42% decline in full-year revenue to $960 million, Array Technologies improved its adjusted gross margin to 34.1%, marking a significant increase. Looking ahead, the company has provided optimistic guidance for 2025, forecasting revenue growth between $1.05 billion and $1.15 billion, representing an expected 20% increase. Additionally, Mizuho (NYSE:MFG) Securities recently downgraded its price target for Array Technologies from $11 to $9, maintaining a Neutral stock rating due to lower sales projections and profitability concerns, particularly in the Brazilian market. The company faces challenges in Brazil, which have impacted its financial outlook. However, Array Technologies remains focused on innovation and expansion, with plans to increase its domestic content trackers and introduce new product innovations to drive future growth.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.