Shoals Technologies Group (SHLS) AI Stock Analysis

• Market Cap: $1.28B
• Dividend Yield: N/A
• Average Volume (3M): 5.60M
• Price to Earnings (P/E): 60.6
• Beta (1Y): 0.72
• Revenue Growth: -11.95%
• EPS Growth: -7.87%
• Country: US
• Employees: 1,290
• Sector: Technology
• Sector Strength: 88
• Industry: Solar
• EPS (TTM): 0.10
• Shares Outstanding: 167,362,700
• 10 Day Avg. Volume: 4,980,779
• 30 Day Avg. Volume: 5,601,004
• PEG Ratio: -0.93
• Price to Book (P/B): 1.67
• Price to Sales (P/S): 2.34
• P/FCF Ratio: 12.95
• Enterprise Value/Market Cap: 0.65
• Enterprise Value/Revenue: 2.10
• Enterprise Value/Gross Profit: 6.22
• Enterprise Value/Ebitda: 14.41
• 1Y Price Target: $7.86
• Price Target Upside: 2.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 67 Neutral
• Price Target: $6.50 ▼(-15.14% Downside)

Shoals Technologies Group's strong earnings call performance and positive technical indicators are offset by concerns over valuation and financial performance, particularly cash flow and operational margins. The company's strategic initiatives and market demand provide a positive outlook, but profitability pressures remain a concern.

Positive Factors

Strong Revenue Growth

The company's strong revenue growth indicates successful strategic initiatives and increasing market demand, supporting long-term expansion.

Record Backlog and Orders

A record backlog and strong order book provide visibility into future revenue streams, ensuring sustained growth and market stability.

Strategic Growth Initiatives

The focus on strategic growth initiatives, including international markets and battery energy storage, positions the company for long-term success.

Negative Factors

Declining Cash Flow

Declining cash flow raises concerns about the company's ability to fund operations and growth initiatives, potentially impacting financial flexibility.

Reduced Gross Profit Margin

A decrease in gross profit margins suggests pressure on cost management, which could affect profitability if not addressed effectively.

Legal Expenses Impacting Profit

Increased legal expenses are impacting operating profit margins, potentially diverting resources from growth and innovation efforts.

Shoals Technologies Group Business Overview & Revenue Model

Company Description

Shoals Technologies Group (SHLS) is a leading provider of electrical balance of system (eBOS) solutions for the solar energy industry. The company specializes in the design and manufacturing of innovative products that enhance the performance and efficiency of solar power systems. Its core offerings include a range of products such as wiring harnesses, electrical enclosures, and combiner boxes, which are essential components for solar installations. Shoals serves various sectors within the renewable energy market, focusing primarily on utility-scale solar projects.

How the Company Makes Money

Shoals Technologies Group generates revenue through the sale of its electrical balance of system products to solar developers, contractors, and utilities involved in solar energy projects. The company’s revenue model primarily relies on direct sales of its innovative eBOS solutions, which are critical for the installation and operation of solar power systems. Key revenue streams include product sales, where Shoals sells its proprietary hardware and accessories that facilitate solar energy generation. Additionally, the company may benefit from strategic partnerships with solar developers and companies, enhancing its market reach and enabling collaborative projects that can lead to increased sales. Factors contributing to its earnings include the growing demand for renewable energy solutions, advancements in solar technology, and the company's ability to provide cost-effective and high-quality products tailored to the needs of the industry.

Shoals Technologies Group Financial Statement Overview

Summary

Shoals Technologies Group shows stable revenue and profitability with improvements in leverage. However, declining cash flow metrics and operational margins highlight potential areas of concern. The company should focus on enhancing operational efficiency and cash flow generation to strengthen its financial position.

Income Statement

Shoals Technologies Group shows moderate revenue growth with a TTM increase of 2.98%. Gross profit margins have slightly decreased from 35.57% to 33.70% TTM, indicating some pressure on cost management. Net profit margin remains stable around 6.13% TTM, reflecting consistent profitability. However, EBIT and EBITDA margins have declined, suggesting potential operational inefficiencies.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.23 TTM, indicating a healthier leverage position. Return on equity is stable at 4.39% TTM, but lower than previous years, suggesting room for improvement in generating returns for shareholders. The equity ratio is strong, showing a solid capital structure.

Cash Flow

Free cash flow has significantly decreased by 83.66% TTM, raising concerns about cash generation capabilities. The operating cash flow to net income ratio is 0.39 TTM, indicating limited cash conversion efficiency. The free cash flow to net income ratio is 0.38 TTM, suggesting potential liquidity constraints.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	400.35M	399.21M	488.94M	326.94M	213.21M	175.52M
Gross Profit	134.90M	142.02M	168.30M	131.31M	82.64M	66.55M
EBITDA	58.23M	64.32M	89.56M	181.05M	48.63M	46.68M
Net Income	24.53M	24.13M	39.97M	127.61M	3.94M	33.77M
Balance Sheet
Total Assets	794.96M	793.08M	843.99M	594.89M	426.41M	195.31M
Cash, Cash Equivalents and Short-Term Investments	4.69M	23.51M	22.71M	8.77M	5.01M	10.07M
Total Debt	131.75M	141.75M	184.70M	239.06M	247.05M	358.83M
Total Liabilities	219.56M	236.28M	299.00M	293.91M	433.91M	379.43M
Stockholders Equity	575.41M	556.80M	545.00M	291.37M	2.55M	-184.12M
Cash Flow
Free Cash Flow	12.09M	72.00M	81.38M	36.30M	-8.21M	50.85M
Operating Cash Flow	31.42M	80.39M	91.95M	39.45M	-4.08M	54.08M
Investing Cash Flow	-14.25M	-8.39M	-10.85M	-3.66M	-17.04M	-3.24M
Financing Cash Flow	-15.68M	-71.19M	-67.17M	-36.59M	20.60M	-47.85M

Shoals Technologies Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHLS, the sentiment is Positive. The current price of 7.66 is above the 20-day moving average (MA) of 7.14, above the 50-day MA of 6.19, and above the 200-day MA of 4.88, indicating a bullish trend. The MACD of 0.40 indicates Negative momentum. The RSI at 63.46 is Neutral, neither overbought nor oversold. The STOCH value of 59.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHLS.

Shoals Technologies Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHLS	67 Neutral	$1.28B	60.65	3.77%	―	-11.95%	-7.87%
ARRY	64 Neutral	1.26B	-4.72	-57.01%	―	6.36%	-1683.09%
FTCI	55 Neutral	107.25M	-1.98	-255.34%	―	-17.53%	8.53%
SEDG	51 Neutral	2.34B	-1.32	-334.37%	―	-36.07%	-233.14%
SPWR	48 Neutral	147.10M	-2.63	57.88%	―	308.47%	76.84%
TYGO	47 Neutral	157.78M	-2.85	-3034.87%	―	52.31%	-2421.56%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

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.