Shoals Technologies Group (SHLS) AI Stock Analysis

• Market Cap: $790.74M
• Dividend Yield: N/A
• Average Volume (3M): 5.35M
• Price to Earnings (P/E): 41.9
• Beta (1Y): 0.85
• Revenue Growth: -18.10%
• EPS Growth: -36.91%
• Country: US
• Employees: 1,290
• Sector: Technology
• Sector Strength: 86
• Industry: Solar
• EPS (TTM): 0.03
• Shares Outstanding: 167,174,800
• 10 Day Avg. Volume: 5,442,008
• 30 Day Avg. Volume: 5,349,000
• PEG Ratio: -0.93
• Price to Book (P/B): 1.67
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.95
• Enterprise Value/Market Cap: 6.30
• Enterprise Value/Revenue: 2.99
• Enterprise Value/Gross Profit: 37.28
• Enterprise Value/Ebitda: 18.91
• 1Y Price Target: $5.71
• Price Target Upside: 20.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 70 Outperform
• Price Target: $5.50 ▲(16.28%Upside)

Shoals Technologies Group demonstrates strong technical performance and optimistic earnings call insights, particularly in growth initiatives and market expansion. However, challenges such as high valuation metrics and revenue decline pose risks. The company's solid balance sheet and cash flow management provide stability, but attention to revenue growth and litigation resolution is crucial.

Positive Factors

Innovation

Despite ongoing litigation, Shoals continues to innovate and has taken robust efforts around intellectual property development.

Market Position

Shoals is more insulated than its competitors who primarily source from China, making it relatively better positioned against tariff impacts.

Revenue Guidance

Shoals reaffirmed revenue guidance with potential to achieve the high end, as management has not seen any indications of project delays from customers.

Negative Factors

Cost Pressures

Labor availability and rising EPC costs are still key variables.

Gross Margin

Gross margin of 35% was below expectations, with management citing strategic pricing initiatives, volume discounts, products mix, and lower fixed cost leverage.

Tariff Volatility

Protracted tariff volatility and potential IRA changes could impact industry at large leading to lower bookings and awards.

Shoals Technologies Group Business Overview & Revenue Model

Company Description

Shoals Technologies Group, Inc. provides electrical balance of system (EBOS) solutions for solar energy projects in the United States. It produces EBOS components, including cable assemblies, inline fuses, combiners, disconnects, recombiners, wireless monitoring systems, junction boxes, transition enclosures, splice boxes, wire management solutions, and IV curve benchmarking devices. The company also sells EV Charging solutions for public and fleet electric vehicle charging stations; and EBOS systems. It sells its products principally to engineering, procurement, and construction firms that build solar energy projects and install electric vehicle charging stations. Shoals Technologies Group, Inc. was founded in 1996 and is headquartered in Portland, Tennessee.

How the Company Makes Money

Shoals Technologies Group generates revenue primarily through the sale of its electrical balance of system (EBOS) products to solar energy project developers and engineering, procurement, and construction (EPC) firms. The company's key revenue streams include the sale of wire harnesses, combiner boxes, and other electrical components essential for solar power generation. Shoals benefits from long-term supply agreements and strategic partnerships with major solar energy companies, which contribute significantly to its earnings. Additionally, the company's focus on innovation and cost-effective solutions helps maintain its competitive edge and attract a broad customer base in the growing renewable energy sector.

Shoals Technologies Group Financial Statement Overview

Summary

Shoals Technologies Group demonstrates solid financial health with strong balance sheet metrics and cash flow management. However, challenges in maintaining revenue growth are evident, which may impact future profitability. The company's stable margins and efficient cash flow operations position it well, but attention to revenue growth is necessary to enhance financial performance further.

Income Statement

Shoals Technologies Group's income statement shows moderate profitability with a gross profit margin of 34.39% and a net profit margin of 5.78% for the TTM period. While the company has experienced fluctuations in revenue, the recent TTM revenue has decreased from the previous year. EBIT and EBITDA margins are stable at 11.29% and 14.77% respectively, indicating efficient operations despite declining revenue.

Balance Sheet

The balance sheet of Shoals Technologies Group shows a healthy equity position with a debt-to-equity ratio of 0.25. The return on equity (ROE) is modest at 4.02%, reflecting moderate returns on shareholder investments. The equity ratio stands at 70.89%, indicating a strong reliance on equity financing which enhances financial stability.

Cash Flow

The cash flow statement indicates effective cash management with a free cash flow to net income ratio of 3.29 and an operating cash flow to net income ratio of 3.70 for the TTM. The company has managed to generate positive free cash flow growth, which is a positive sign of operational efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	388.76M	399.21M	488.94M	326.94M	213.21M	175.52M
Gross Profit	133.70M	142.02M	168.30M	131.31M	82.64M	66.55M
EBITDA	57.45M	64.32M	89.56M	181.05M	48.63M	46.68M
Net Income	22.48M	24.13M	39.97M	127.61M	3.94M	33.77M
Balance Sheet
Total Assets	0.00	793.08M	843.99M	594.89M	426.41M	195.31M
Cash, Cash Equivalents and Short-Term Investments	7.08M	23.51M	22.71M	8.77M	5.01M	10.07M
Total Debt	0.00	141.75M	184.70M	239.06M	247.05M	358.83M
Total Liabilities	0.00	236.28M	299.00M	293.91M	433.91M	379.43M
Stockholders Equity	149.91M	556.80M	545.00M	291.37M	2.55M	-184.12M
Cash Flow
Free Cash Flow	73.97M	72.00M	81.38M	36.30M	-8.21M	50.85M
Operating Cash Flow	83.09M	80.39M	91.95M	39.45M	-4.08M	54.08M
Investing Cash Flow	-9.12M	-8.39M	-10.85M	-3.66M	-17.04M	-3.24M
Financing Cash Flow	-53.59M	-71.19M	-67.17M	-36.59M	20.60M	-47.85M

Shoals Technologies Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHLS, the sentiment is Neutral. The current price of 4.73 is below the 20-day moving average (MA) of 4.99, above the 50-day MA of 4.58, and above the 200-day MA of 4.66, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 46.33 is Neutral, neither overbought nor oversold. The STOCH value of 22.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SHLS.

Shoals Technologies Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXT	76 Outperform	$8.62B	16.83	39.33%	―	21.46%	123.22%
SHLS	70 Outperform	$790.74M	41.86	3.43%	―	-18.10%	-36.91%
JKS	59 Neutral	$1.08B	118.10	-9.49%	6.84%	-30.26%	-156.69%
ARRY	55 Neutral	$982.40M	―	-49.11%	―	-21.31%	-593.57%
SEDG	51 Neutral	$1.17B	―	-121.50%	―	-57.89%	-559.87%
Sector *	49 Neutral	C$2.90B	2.14	-80.91%	2.95%	6.62%	-18.96%
CSIQ	49 Neutral	$758.80M	20.05	-0.39%	―	-19.06%	-104.91%

Shoals Technologies Group Corporate Events

Shoals Technologies Holds 2025 Annual Shareholder Meeting

On May 1, 2025, Shoals Technologies Group, Inc. held its 2025 Annual Meeting of Shareholders, where key proposals were voted on. Shareholders elected Class I directors for a one-year term, approved the compensation of named executive officers, and ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025.

Shoals Technologies Announces CAO Resignation and CFO Transition

Shoals Technologies Group reported its financial results for the first quarter of 2025, showing a revenue of $80.4 million and a net loss of $0.3 million. Despite a decrease in revenue and gross profit compared to the prior year, the company highlighted a robust backlog and awarded orders totaling $645.1 million, reflecting a 4.9% year-over-year increase. The company also announced the resignation of Chief Accounting Officer Inez Lund, effective May 16, 2025, with CFO Dominic Bardos taking over her responsibilities. Shoals remains optimistic about its market position, citing strong demand in international markets and strategic initiatives driving growth in various sectors.