Array Technologies (ARRY) shares jumped 10% in the extended trading session on Tuesday after the company’s second-quarter numbers outperformed estimates. Array offers tracker solutions and services for solar projects.
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Boosted by the STI Norland acquisition, revenue surged a whopping 116.2% over the prior year period to $424.9 million, outperforming estimates by ~$88 million. Excluding the acquisition impact Array still achieved organic growth of 79% owing to improved volumes as well as the average selling price. EPS at $0.09 too, comfortably beat consensus by $0.07.
Kevin Hostetler, the CEO of Array remarked, “This substantial growth is a testament to not only Array’s product and service offerings, but also our ability to provide flexible solutions for our customers in a shifting demand landscape while also maintaining a relentless focus on operational execution.”
Impressively, along with the top line growth, the company also achieved an improvement in its gross margin (11%) for the third consecutive quarter on the back of a better contract pricing mix.
Importantly, at the end of June, Array’s total executed contracts and order wins were $1.9 billion, indicating a 110% jump from a year ago levels. Additionally, buoyed by the improving metrics, Array now sees revenue land between $1.3 billion and $1.5 billion for the full year of 2022. EPS is anticipated to range between $0.25 and $0.35 during this period.
Is Array Technologies a Good Investment?
Array shares have now climbed 55.1% over the past month, and J.P. Morgan’s analyst Mark Strouse expects this run to continue. The analyst has reiterated a Buy rating on the stock while increasing the price target to $33 from $28. This implies an 80.43% potential upside.
The Street, meanwhile, has a Moderate Buy consensus rating on Array and an average price target of $18.18.
While Wall Street is cautiously optimistic, bloggers are Bullish toward Array. Our data dive at TipRanks indicates that 100% of the bloggers tracking Array have a Bullish sentiment on the stock as compared to a sector average of 65%.
Major Macro Positives are Building Up for Array
After incurring a loss over the last two quarters, Array’s strategic actions, aided by better pricing, are beginning to yield results. Importantly, the recent executive order aimed at domestic clean energy remains a major positive development. As a result, Array expects projects worth ~$240 million to now move forward.
Furthermore, the anticipated passage of the inflation reduction act could offer clarity on the incentive structure for the solar sector.
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