Latest news with #SHLS
Yahoo
28-05-2025
- Business
- Yahoo
3 Reasons to Avoid SHLS and 1 Stock to Buy Instead
Although the S&P 500 is down 1.9% over the past six months, Shoals's stock price has fallen further to $4.69, losing shareholders 10.2% of their capital. This might have investors contemplating their next move. Is there a buying opportunity in Shoals, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it's free. Even though the stock has become cheaper, we're sitting this one out for now. Here are three reasons why SHLS doesn't excite us and a stock we'd rather own. Investors interested in Renewable Energy companies should track backlog in addition to reported revenue. This metric shows the value of outstanding orders that have not yet been executed or delivered, giving visibility into Shoals's future revenue streams. Shoals's backlog came in at $645.1 million in the latest quarter, and over the last two years, its year-on-year growth averaged 2.7%. This performance was underwhelming and suggests that increasing competition is causing challenges in winning new orders. We track the long-term change in earnings per share (EPS) because it highlights whether a company's growth is profitable. Shoals's full-year EPS dropped 8.3%, or 2% annually, over the last four years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Shoals's low margin of safety could leave its stock price susceptible to large downswings. ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Unfortunately, Shoals's ROIC has decreased over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities. Shoals's business quality ultimately falls short of our standards. Following the recent decline, the stock trades at 11× forward P/E (or $4.69 per share). While this valuation is reasonable, we don't really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. Let us point you toward one of our top software and edge computing picks. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
Yahoo
07-05-2025
- Business
- Yahoo
Shoals Technologies Group, Inc. (SHLS): A Bull Case Theory
We came across a bullish thesis on Shoals Technologies Group, Inc. (SHLS) on Value Investing Subreddit Page by chird_. In this article, we will summarize the bulls' thesis on SHLS. Shoals Technologies Group, Inc. (SHLS)'s share was trading at $4.41 as of May 6th. SHLS's trailing and forward P/E were 40.09 and 11.03 respectively according to Yahoo Finance. The Most Air Polluted City in the US A photovoltaic field at dawn, its solar panels shimmering in the light of a new day. Shoals Technologies (SHLS) stands out as a deeply undervalued opportunity in the renewable energy sector, especially as global demand for clean energy and AI-driven power infrastructure accelerates. Specializing in electrical balance of system solutions, Shoals is strategically expanding into supporting large-scale data centers, positioning itself at the heart of the AI energy boom. Trading around $4.40, with a fair value estimate of $12.95, the stock offers over 65% upside. Financials are compelling: a PEG ratio of 0.37, forward PE of 8.45, and a free cash flow yield above 8% reflect a growth story trading at value levels. The company maintains a strong balance sheet, with low debt (0.25 debt/equity) and high liquidity (current ratio over 2), while generating consistent cash flow. Although ROIC remains modest at 4.42%, the stock's risk/reward profile is highly attractive. With overlooked fundamentals and long-term tailwinds, SHLS presents a compelling entry point before broader market recognition. Shoals Technologies Group, Inc. (SHLS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held SHLS at the end of the fourth quarter which was 27 in the previous quarter. While we acknowledge the risk and potential of SHLS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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 the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey.
Yahoo
23-04-2025
- Business
- Yahoo
Shoals (SHLS): Buy, Sell, or Hold Post Q4 Earnings?
Shoals has gotten torched over the last six months - since October 2024, its stock price has dropped 30.9% to $3.38 per share. This was partly driven by its softer quarterly results and might have investors contemplating their next move. Is there a buying opportunity in Shoals, or does it present a risk to your portfolio? Check out our in-depth research report to see what our analysts have to say, it's free. Even with the cheaper entry price, we're sitting this one out for now. Here are three reasons why SHLS doesn't excite us and a stock we'd rather own. Started in Huntsville, Alabama, Shoals (NASDAQ:SHLS) designs and manufactures products that make solar energy systems work more efficiently. Investors interested in Renewable Energy companies should track backlog in addition to reported revenue. This metric shows the value of outstanding orders that have not yet been executed or delivered, giving visibility into Shoals's future revenue streams. Over the last two years, Shoals failed to grow its backlog, which came in at $634.7 million in the latest quarter. This performance was underwhelming and shows the company faced challenges in winning new orders. It also suggests there may be increasing competition or market saturation. If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. As you can see below, Shoals's margin dropped by 10.9 percentage points over the last five years. If its declines continue, it could signal increasing investment needs and capital intensity. Shoals's free cash flow margin for the trailing 12 months was 18%. A company's ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Over the last few years, Shoals's ROIC has unfortunately decreased. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities. Shoals isn't a terrible business, but it doesn't pass our quality test. After the recent drawdown, the stock trades at 7.6× forward price-to-earnings (or $3.38 per share). While this valuation is optically cheap, the potential downside is big given its shaky fundamentals. We're pretty confident there are more exciting stocks to buy at the moment. We'd recommend looking at a safe-and-steady industrials business benefiting from an upgrade cycle. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
