Shoals Technologies stock price target lowered to $7 at UBS on margin outlook

Published 06/08/2025, 12:02
Shoals Technologies stock price target lowered to $7 at UBS on margin outlook

Investing.com - UBS lowered its price target on Shoals Technologies Group (NASDAQ:SHLS) to $7.00 from $7.50 on Wednesday, while maintaining a Buy rating on the stock. The company’s shares, currently trading at $4.67, have declined over 13% in the past week, according to InvestingPro data.

The price target reduction follows Shoals’ second-quarter 2025 adjusted EBITDA results, which came in line with analyst estimates. The company increased its full-year 2025 revenue guidance by 7% at the midpoint while maintaining its original adjusted EBITDA guidance for the year. With a healthy current ratio of 2.34 and moderate debt levels, InvestingPro analysis suggests the company maintains strong financial flexibility.

UBS revised its adjusted EBITDA forecasts for Shoals to $102 million, $133 million, and $153 million for 2025, 2026, and 2027, respectively. These figures represent a modest reduction from previous estimates of $103 million, $143 million, and $160 million.

The downward revision stems from slightly lower gross margin expectations related to incremental products and new customers, according to UBS.

Despite the price target cut, UBS maintained its Buy rating on Shoals, citing potential growth in customer orders as the industry moves past what it describes as "the trough of policy uncertainty" in the second quarter of 2025, along with longer-term product pricing upside.

In other recent news, Shoals Technologies Group reported its Q2 2025 earnings, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.10, exceeding the forecast of $0.08, and reported revenue of $110.8 million, which was higher than the anticipated $104.77 million. Following the earnings report, Jefferies adjusted its price target for Shoals Technologies, lowering it to $6.00 from $7.20, while maintaining a Buy rating on the stock. The decision to lower the price target came despite Shoals Technologies’ strong performance and an increased revenue outlook for fiscal year 2025. These developments reflect the company’s recent financial activities and market reactions.

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