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1. Company Snapshot

1.a. Company Description

Shoals Technologies Group, Inc.provides electrical balance of system (EBOS) solutions for solar energy projects in the United States.It produces EBOS components, including cable assemblies, inline fuses, combiners, disconnects, recombiners, wireless monitoring systems, junction boxes, transition enclosures, splice boxes, wire management solutions, and IV curve benchmarking devices.


The company also sells EV Charging solutions for public and fleet electric vehicle charging stations; and EBOS systems.It sells its products principally to engineering, procurement, and construction firms that build solar energy projects and install electric vehicle charging stations.Shoals Technologies Group, Inc.


was founded in 1996 and is headquartered in Portland, Tennessee.

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1.b. Last Insights on SHLS

Recent negative drivers behind Shoals Technologies Group's performance include: * Investigation into possible securities fraud violations by Levi & Korsinsky, citing undisclosed defects in wire harnesses and potential remediation costs. * Missed Q3 earnings estimates, with a quarterly earnings of $0.08 per share, compared to the Zacks Consensus Estimate of $0.10 per share. * Reports of defects in wire harnesses installed in solar fields, which may lead to costly remediation efforts. * Uncertainty surrounding the quality and reliability of the company's products used for solar power generation.

1.c. Company Highlights

2. Shoals Technologies Group Posts Strong Q4 Revenue Growth Amidst Margin Pressures

Shoals Technologies Group reported revenue of approximately $148 million for the fourth quarter, representing a 38.6% year-over-year increase. Gross profit was $46.9 million, while gross profit percentage was lower than expected due to higher tariffs, labor costs, and plant overhead expenses. Adjusted EBITDA was $30.3 million, a 14.7% growth year-over-year. Adjusted diluted earnings per share (EPS) was $0.10, a 22% increase from the prior-year period, though it missed analyst estimates of $0.14. The company's guidance for the first quarter and full year 2026 includes revenue in the range of $125 million to $135 million and adjusted EBITDA in the range of $16 million to $21 million.

Publication Date: Mar -04

📋 Highlights
  • Revenue Growth:: Q4 revenue reached $148 million, a 38.6% increase year-over-year.
  • Backlog Expansion:: Record backlog and awarded orders totaled $748 million, driven by strong commercial team performance.
  • Adjusted EBITDA:: Q4 adjusted EBITDA was $30.3 million, reflecting 14.7% year-over-year growth.
  • 2026 Guidance:: Revenue projected at $560–600 million (22% YoY growth at midpoint), with adjusted EBITDA of $110–130 million (21% YoY growth at midpoint).
  • Gross Margin Outlook:: Expected low-to-mid 30s gross margin in 2026 due to tariffs and operational inefficiencies, with margin improvement anticipated in 2027.

Operational Highlights and Business Outlook

The company highlighted significant growth in new orders, resulting in a record backlog and awarded orders of $748 million. Brandon Moss emphasized the company's focus on growth diversification, profitability, and innovation, citing the introduction of new products and the expansion of the addressable market. The company's battery energy storage system (BESS) business has seen significant growth and is expected to continue to expand in 2026. As Moss noted, "Our core solar business accelerated by 30% in the back half of last year, and we expect continued bookings growth in 2026."

Margin Pressures and Tariff Impact

The company's gross margin percentage was impacted by transitory factors such as tariffs and inefficient operations during the transition to their new mega facility. Dominic Bardos mentioned that they expect a low to mid-thirties gross margin percentage in 2026. The company expects a similar level of tariff impact in 2026 as in 2025, around three percentage points. However, any reduction in tariffs would also reduce the pass-through impact to customers.

Valuation and Growth Prospects

With a P/E Ratio of 29.47 and an EV/EBITDA of 16.39, the market appears to be pricing in significant growth prospects for Shoals Technologies Group. Analysts estimate next year's revenue growth at 11.6%, which may not be sufficient to justify the current valuation multiples. The company's ROE of 5.78% and ROIC of 5.02% indicate a relatively modest return on equity and invested capital.

3. NewsRoom

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Shoals Technologies Group, Inc. (SHLS) Discusses Battery Energy Storage Solutions and Market Opportunities Transcript

Mar -31

Source: seekingalpha.com

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Shoals Technologies Group, Inc. Announces BESS Virtual Webinar with Barclays

Mar -30

Source: globenewswire.com

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Is the Options Market Predicting a Spike in Shoals Technologies Stock?

Mar -30

Source: zacks.com

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Assenagon Asset Management S.A. Has $3.52 Million Holdings in Shoals Technologies Group, Inc. $SHLS

Mar -30

Source: defenseworld.net

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American Century Companies Inc. Grows Position in Shoals Technologies Group, Inc. $SHLS

Mar -09

Source: defenseworld.net

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Shoals Technologies Group, Inc. $SHLS Shares Purchased by Citigroup Inc.

Mar -07

Source: defenseworld.net

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Shoals Technologies Group (NASDAQ:SHLS) Trading Down 9.3% After Analyst Downgrade

Feb -27

Source: defenseworld.net

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CORRECTED PRESS RELEASE: Shoals Technologies Group, Inc. Reports Financial Results for Fourth Quarter 2025

Feb -25

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.37%)

6. Segments

System Solutions

Expected Growth: 7%

Shoals Technologies Group's System Solutions segment growth is driven by increasing adoption of renewable energy, rising demand for electrification of transportation, and growing need for energy storage solutions. Additionally, the company's focus on providing innovative and cost-effective solutions, expanding partnerships, and strategic acquisitions are contributing to its 7% growth.

Components

Expected Growth: 9%

Shoals Technologies Group, Inc.'s 9% growth is driven by increasing adoption of renewable energy sources, rising demand for electric vehicles, and growing need for energy storage solutions. The company's innovative products, such as balance of system solutions, are well-positioned to capitalize on these trends, leading to strong revenue growth.

7. Detailed Products

Electrical Balance of System (EBOS) Solutions

Shoals Technologies Group, Inc. offers a range of electrical balance of system (EBOS) solutions, including connectors, cables, and harnesses, designed to optimize the performance and efficiency of solar and energy storage systems.

Solar Junction Boxes

Shoals Technologies Group, Inc. provides solar junction boxes that enable safe and efficient connections between solar panels and inverters, ensuring maximum energy output.

Inverter Solutions

Shoals Technologies Group, Inc. offers a range of inverter solutions, including string inverters, central inverters, and microinverters, designed to optimize energy conversion and transmission.

Energy Storage Solutions

Shoals Technologies Group, Inc. provides energy storage solutions, including battery management systems and energy storage inverters, designed to optimize energy storage and release.

Monitoring and Control Systems

Shoals Technologies Group, Inc. offers monitoring and control systems that enable real-time monitoring and control of solar and energy storage systems, ensuring optimal performance and efficiency.

8. Shoals Technologies Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Shoals Technologies Group, Inc. is medium due to the presence of alternative energy storage solutions, but the company's focus on lithium-ion batteries and energy storage systems provides some differentiation.

Bargaining Power Of Customers

The bargaining power of customers for Shoals Technologies Group, Inc. is low due to the company's strong relationships with its customers and the customized nature of its products.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Shoals Technologies Group, Inc. is medium due to the company's dependence on a few key suppliers for critical components, but the company's scale and relationships with suppliers mitigate this risk.

Threat Of New Entrants

The threat of new entrants for Shoals Technologies Group, Inc. is high due to the growing demand for energy storage solutions and the relatively low barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry for Shoals Technologies Group, Inc. is high due to the competitive nature of the energy storage industry and the presence of established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 25.09%
Debt Cost 13.21%
Equity Weight 74.91%
Equity Cost 13.21%
WACC 13.21%
Leverage 33.50%

11. Quality Control: Shoals Technologies Group, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Shoals Technologies

A-Score: 4.3/10

Value: 2.0

Growth: 7.9

Quality: 5.2

Yield: 0.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.95$

Current Price

6.95$

Potential

-0.00%

Expected Cash-Flows