Trump announces landmark trade deal with EU
On Thursday, Jefferies analyst Julian Dumoulin-Smith adjusted the price target for Shoals Technologies Group (NASDAQ:SHLS), a leading provider of electrical balance of system (EBOS) solutions for solar energy projects, to $4.60 from the previous $5.20, while reiterating a Hold rating on the stock. The stock, currently trading at $3.88, has experienced significant pressure, falling nearly 75% over the past year. According to InvestingPro data, the company is currently trading below its Fair Value, with 8 analysts recently revising their earnings expectations downward.
The revision reflects a cautious near-term (NT) outlook, despite management’s efforts to improve visibility into customer project timelines, which aims to prevent further project delays. This move by management has bolstered Jefferies’ confidence in the company’s guidance for the year 2025. The analysts anticipate that the financial performance for 2025 will be stronger in the latter half of the year, although it may still be affected by the general volatility in the industry. InvestingPro’s comprehensive analysis reveals that despite current challenges, the company maintains a healthy current ratio of 2.33, with liquid assets exceeding short-term obligations. Get access to the full Research Report and 17 additional ProTips for deeper insights into SHLS’s financial health and growth potential.
Jefferies notes that Shoals Technologies’ proprietary BLA system and its domestic supply chain could provide some stability and mitigate potential downside risks. While the immediate future presents mixed prospects, the long-term (LT) outlook for the company remains positive, according to the analyst’s commentary. The company maintains a moderate debt level with a total debt to capital ratio of 0.18, and has remained profitable over the last twelve months with a gross profit margin of 35.6%.
Dumoulin-Smith’s statement highlighted the rationale behind maintaining the Hold rating, stating, "We maintain our Hold and essentially view NT outlook mixed. Mgmt is delivering on better visibility into customer project timeline to avoid additional push-outs which raises our confidence in the ’25 guidance. We expect ’25 to be back-half-weighted and susceptible to industry-wide volatility but believe that SHLS’ BLAO and domestic supply chain offers some floor to the downside. LT outlook remains intact, lowering PT to $4.60." For a complete understanding of SHLS’s market position and growth potential, access the detailed InvestingPro Research Report, which provides comprehensive analysis of the company’s financials, market position, and future prospects.
Shoals Technologies Group specializes in EBOS components for solar energy projects, including the BLA system, which is an innovative approach to solar array wiring. The company’s focus on a domestic supply chain is a strategic move to mitigate risks associated with global supply chain disruptions.
In other recent news, Shoals Technologies Group, Inc. reported fourth-quarter earnings, posting adjusted earnings per share of $0.08, which missed analyst estimates by $0.01. However, the company’s revenue for the quarter was $107 million, surpassing expectations of $101.98 million, though it marked an 18% decline year-over-year from $130.4 million. Shoals provided guidance for the upcoming year that fell short of Wall Street’s projections, with anticipated Q1 2025 revenue between $70-80 million, significantly below the consensus estimate of $109.04 million. For the full year 2025, Shoals forecasts revenue of $410-450 million, compared to analyst expectations of $443.2 million.
CEO Brandon Moss attributed the cautious outlook to disruptions in the U.S. utility-scale solar market, citing political shifts, supply chain issues, and high interest rates as contributing factors. Despite these challenges, the company ended Q4 with a backlog and awarded orders totaling $634.7 million, reflecting a 6.5% increase from the previous quarter. Oppenheimer analyst Colin Rusch reiterated an Outperform stock rating, highlighting that Shoals’ backlog growth is encouraging amid concerns about bookings activity. The analyst noted that while investors may be underwhelmed by the Q1 2025 and cash flow guidance, the 2025 guidance is fully covered above the midpoint with existing orders.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.