Latest news with #Shoals
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
16-05-2025
- Business
- Yahoo
Shoals sinks after BNP downgrades on Nextracker competition
As previously reported, BNP Paribas Exane downgraded Shoals Technologies (SHLS) to Underperform from Neutral with a price target of $4, down from $4.50. Nextracker (NXT) is expanding into a market where Shoals operates with its acquisition of Bentek, the analyst told investors in a research note. The firm says Shoals 'hasn't been able to catch a break.' It believes Nextracker is constantly improving costs and supply chain, and notes the company will be bundling, optimizing, expanding capacity.' Nextracker is probably talking to all of Shoals' customers as it captures 50%-60% of the tracker market, contends BNP. The firm thinks product difference 'might not matter.' Shares of Shoals are down 23%, or $1.44, to $4.68 in late morning trading. Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>> See Insiders' Hot Stocks on TipRanks >> Read More on SHLS: Disclaimer & DisclosureReport an Issue Shoals downgraded to Underperform from Neutral at BNP Paribas Exane Shoals Technologies price target raised to $6 from $5 at Guggenheim Shoals Technologies Holds 2025 Annual Shareholder Meeting Cautious Hold Rating for Shoals Technologies Group Amid Strong Demand and Uncertainties Shoals Technologies price target raised to $5.50 from $4.50 at Citi Sign in to access your portfolio
Yahoo
06-05-2025
- Business
- Yahoo
Shoals (NASDAQ:SHLS) Surprises With Strong Q1, Stock Soars
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Shoals's recent performance shows its demand has slowed significantly as its annualized revenue growth of 3.4% over the last two years was well below its five-year trend. A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Luckily, Shoals's sales grew at an incredible 20.9% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers. 'We began the year with a strong start, delivering revenue above our guided range. The investment that we have made in our commercial function is paying dividends as evidenced in both the growth and quality of our order book. I'm proud of the robust backlog and awarded orders of $645 million, with approximately $500 million scheduled for the coming four quarters. The strategic initiatives that are driving increased market penetration and diversification are progressing very well, with commercial success in international, CC&I, BESS, and OEM markets,' said Brandon Moss, CEO of Shoals. EBITDA guidance for the full year is $107.5 million at the midpoint, above analyst estimates of $103.8 million The company reconfirmed its revenue guidance for the full year of $430 million at the midpoint Is now the time to buy Shoals? Find out in our full research report . Solar energy systems company Shoals (NASDAQ:SHLS) reported Q1 CY2025 results topping the market's revenue expectations , but sales fell by 11.2% year on year to $80.63 million. On top of that, next quarter's revenue guidance ($105 million at the midpoint) was surprisingly good and 10.4% above what analysts were expecting. Its non-GAAP profit of $0.03 per share was in line with analysts' consensus estimates. Story Continues Shoals Year-On-Year Revenue Growth We can better understand the company's revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. Shoals's backlog reached $645.1 million in the latest quarter and averaged 2.7% year-on-year growth over the last two years. Because this number is in line with its revenue growth, we can see the company effectively balanced its new order intake and fulfillment processes. Shoals Backlog This quarter, Shoals's revenue fell by 11.2% year on year to $80.63 million but beat Wall Street's estimates by 8.6%. Company management is currently guiding for a 5.8% year-on-year increase in sales next quarter. Looking further ahead, sell-side analysts expect revenue to grow 15.2% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will catalyze better top-line performance. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Operating Margin Shoals has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 16.1%. This result isn't surprising as its high gross margin gives it a favorable starting point. Looking at the trend in its profitability, Shoals's operating margin decreased by 9.6 percentage points over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Shoals Trailing 12-Month Operating Margin (GAAP) This quarter, Shoals generated an operating profit margin of 5.3%, down 7.4 percentage points year on year. Since Shoals's operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased. Earnings Per Share Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Shoals's EPS grew at a weak 2.5% compounded annual growth rate over the last five years, lower than its 20.9% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded. Shoals Trailing 12-Month EPS (Non-GAAP) Diving into the nuances of Shoals's earnings can give us a better understanding of its performance. As we mentioned earlier, Shoals's operating margin declined by 9.6 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; taxes and interest expenses can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For Shoals, its two-year annual EPS declines of 18.7% show it's continued to underperform. These results were bad no matter how you slice the data. In Q1, Shoals reported EPS at $0.03, down from $0.07 in the same quarter last year. This print missed analysts' estimates. Over the next 12 months, Wall Street expects Shoals to perform poorly. Analysts forecast its full-year EPS of $0.30 will hit $0.43. Key Takeaways from Shoals's Q1 Results We were impressed by how significantly Shoals blew past analysts' revenue and EBITDA expectations this quarter. We were also glad its revenue guidance for next quarter and its full-year EBITDA guidance trumped Wall Street's estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 5.8% to $3.99 immediately after reporting. Indeed, Shoals had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
05-05-2025
- Business
- Yahoo
Shoals (SHLS) Q1 Earnings Report Preview: What To Look For
Solar energy systems company Shoals (NASDAQ:SHLS) will be announcing earnings results tomorrow before the bell. Here's what to look for. Shoals beat analysts' revenue expectations by 4.9% last quarter, reporting revenues of $107 million, down 18% year on year. It was a slower quarter for the company, with full-year EBITDA guidance missing analysts' expectations. Is Shoals a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Shoals's revenue to decline 18.3% year on year to $74.23 million, a further deceleration from the 13.6% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.04 per share. Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Shoals has missed Wall Street's revenue estimates four times over the last two years. Looking at Shoals's peers in the renewable energy segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Generac delivered year-on-year revenue growth of 5.9%, beating analysts' expectations by 2.3%, and Bloom Energy reported revenues up 38.6%, topping estimates by 11.9%. Generac's stock price was unchanged after the resultswhile Bloom Energy was down 8.2%. Read our full analysis of Generac's results here and Bloom Energy's results here. There has been positive sentiment among investors in the renewable energy segment, with share prices up 13% on average over the last month. Shoals is up 10.9% during the same time and is heading into earnings with an average analyst price target of $6.06 (compared to the current share price of $3.75). Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story. Sign in to access your portfolio
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
