Stock of the Day

March 11, 2024

Shoals Technologies Group (SHLS)

$6.92
-$0.22 (-3.1%)
Market Cap: $1.20B

About Shoals Technologies Group

Shoals Technologies Group, Inc. provides electrical balance of system (EBOS) solutions and components for solar, battery energy, and electric vehicle (EV) charging applications in the United States and internationally. The company designs, manufactures, and sells system solutions for both homerun and combine-as-you-go wiring architectures, as well as offers technical support services. It provides EBOS components, including combiners; plug-n-play branch connectors and inline fuses; AC disconnects; recombiners; wireless monitoring; junction boxes; wire management; EV power cabinets; and battery energy storage systems cabinets, as well as cable assemblies, transition enclosures, and splice boxes. In addition, the company offers eMobility solutions, such as a power center, which combines equipment needed to protect the charging equipment and transform voltage levels from the electric utility to those needed on the respective site; quick connect solutions for chargers to connect to the Shoals system; big lead assembly (BLA) technology in the EV space to connect multiple chargers to a single power center; and a raceway system that protects the above ground EV BLAs in walk over and drive over applications. Further, it provides Snapshot IV, a solar operations and maintenance solution that monitors the specific voltage and current of individual solar panels and compares the results against the manufacturer's projected performance. The company sells its products to engineering, procurement, and construction firms that build solar energy projects; utilities; solar developers, independent power producers; solar module manufacturers; and charge point operators. Shoals Technologies Group, Inc. was founded in 1996 and is headquartered in Portland, Tennessee.

Today's Trend

Shoals Technologies Group, Inc. (NASDAQ: SHLS) shares decreased as investors weighed a strong second-quarter revenue and adjusted-profit performance against weaker GAAP profitability, compressed margins and a cautious outlook relative to expectations.

  • Second-quarter revenue rose 47.4% year over year to $163.4 million, exceeding the $160.0 million consensus estimate. Adjusted EPS of $0.12 also topped expectations of $0.10. Shoals Q2 earnings beat estimates
  • Adjusted EBITDA increased to $31.6 million from $24.7 million, while backlog and awarded orders reached a record $801.4 million, up 19.4% year over year and 5.7% sequentially. Battery-storage demand was cited as an important growth driver. Shoals reports second-quarter growth
  • Management maintained full-year 2026 revenue guidance of $600 million to $640 million and expects third-quarter revenue of $150 million to $170 million, supporting the view that demand remains resilient. Some analysts argue the market may be underestimating Shoals’ potential for margin improvement as its new facility ramps. Shoals Q2 margin review
  • Analyst views remain mixed following the results, with published price targets generally clustering near $10 but no clear consensus on the pace of the recovery. Analysts conflicted on Shoals
  • GAAP gross margin fell to 30.3% from 37.2% because of new-facility inefficiencies, product-quality rework, material inefficiencies and product mix. Net income declined to $12.1 million from $13.9 million, despite higher revenue.
  • Third-quarter revenue guidance has a midpoint of $160 million, slightly above the prior consensus of $159.1 million, but full-year guidance has a midpoint of $620 million, modestly below the $622.7 million estimate. Operating cash flow was negative $34.6 million in the first half, partly reflecting a sharp inventory build, while debt increased.
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