Is Shoals Technologies Group, Inc. (SHLS) Among The Most Undervalued Renewable Energy Stocks To Buy?

Yahoo

03-05-2025

We recently published a list of . In this article, we are going to take a look at where Shoals Technologies Group, Inc. (NASDAQ:SHLS) stands against other most undervalued renewable energy stocks.
In 2024, global energy demand increased by 2.2%, quicker than the average over the last decade. Electricity use rose significantly, up 4.3% from last year, primarily due to hotter temperatures, electrification, and the growing digital sector. Renewables were the biggest contributors to the higher energy supply, followed by natural gas and coal. Most of the demand growth came from emerging economies, especially China and India. Natural gas had the strongest growth among fossil fuels, while oil demand softened, plunging below 30% of the energy mix for the first time in 50 years. According to the International Energy Agency, more than 80% of new electricity generation came from renewables and nuclear power in 2024. Solar and wind energy hit new records, and EV sales skyrocketed past 17 million units.
Solar capacity grew by 88% last year, helping it overtake hydropower and nuclear as the fourth largest source of installed capacity. While wind power faced hurdles like supply chain issues and permitting delays, it still set a new generation record and even outperformed coal for two straight months. Battery storage also saw impressive growth, rising by 64%, as utilities used it to store extra wind and solar energy. Looking ahead to 2025, Deloitte expects clean energy demand to grow even more, driven by the rise of clean tech manufacturing, data centers, and carbon capture projects, all of which are increasingly relying on 24/7 clean power.
The American nonprofit organization, Resources for the Future, noted that clean energy saw a major boost with a record $2 trillion invested in technologies like renewables and energy-efficient infrastructure during 2024. This sped up the global energy transition, especially in solar and wind power. While renewables are now some of the cheapest energy sources, fossil fuels, especially coal and gas, still make up a big part of global energy use. Coal is expected to decline significantly by 2050, while the role of gas depends on how ambitious climate policies become. Regions like the United States, Europe, and especially China have led solar growth, but other countries are starting to catch up. However, high costs and financial risks in developing countries could slow things down.
With that outlook in mind, let's take a look at the most undervalued renewable energy stocks to buy.
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For this article, we made a list of all renewable energy stocks listed on American exchanges and picked the 10 stocks with the lowest P/E ratios to compile this list. We have also mentioned the hedge fund sentiment around the holdings, as per Insider Monkey's Q4 2024 database, ranking the list from least to most hedge fund holders.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ().
PE Ratio as of April 30: 27.07
Number of Hedge Fund Holders: 31
Shoals Technologies Group, Inc. (NASDAQ:SHLS) designs and manufactures electrical systems for the solar and battery storage industries. The company provides a wide range of products, including solar lead assemblies, cables, combiners, and performance monitoring solutions. It is one of the most undervalued stocks to buy.
On March 13, Oppenheimer analyst Colin Rusch reiterated an Outperform rating on Shoals Technologies Group, Inc. (NASDAQ:SHLS). Despite a 75% drop in stock price, SHLS shows strong demand, healthy liquidity, and profitability. Rusch also highlighted bipartisan support for renewable energy, aided by the Inflation Reduction Act funding, and maintained a $10 price target for the stock.
Shoals Technologies Group, Inc. (NASDAQ:SHLS) announced on March 26 a collaboration with First Solar to strengthen domestic manufacturing in Alabama, supporting the reshoring of the US solar supply chain. First Solar's new $1.1 billion facility in Alabama has created over 800 jobs, and Shoals provides custom junction boxes made locally, helping solidify FSLR as the largest solar manufacturer in the Western Hemisphere.
Among the hedge funds tracked by Insider Monkey, Shoals Technologies Group, Inc. (NASDAQ:SHLS) was part of 31 public stock portfolios at the end of Q4 2024. Steve Cohen's Point72 Asset Management was the biggest stakeholder of the company, with 5.5 million shares worth $30.6 million.
Overall, SHLS ranks 5th among the most undervalued renewable energy stocks to buy right now. While we acknowledge the potential of SHLS as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SHLS but that trades at less than 5 times its earnings, check out our report about this .
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Disclosure: None. This article is originally published at Insider Monkey.