One-glance verdict
Within fair range
$5.64 our estimate vs market $7.47
Wall Street consensus: $11.32 (100.7% higher than our fair-value estimate)
32% above our estimate
Fundamentals snapshot
Shoals Technologies Group, Inc.
SHLS · NGM · Technology · Solar
Current price
$7.47
52-week range
$5.43 - $13.18
Market cap
$1.26B
Balance sheet
Watch
5.64x Adequate
Net debt $218.09M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 23.7% last year.
- Reward Returns 5.3% on equity, ahead of 40% of its peers.
- Risk Operating margin compressed from 20.3% to 13.8% over 3 years.
- Risk Insider ownership is only 1.1% (peer median: 1.2%).
What this company does
Shoals Technologies Group, Inc.
Shoals Technologies makes the complex electrical wiring and connection systems that are essential for large-scale solar farms and battery storage projects. The company primarily earns money by selling these components as pre-assembled kits to the construction firms and utility companies that build these renewable energy plants. This matters because as more solar projects are built, the demand for Shoals' products, which aim to make installation faster and cheaper, could also grow.
How the company got here
Founded in 1996 as a parts supplier for the automotive industry, Shoals Technologies Group brought its manufacturing discipline to the solar industry in 2002. The company initially supplied components and cable assemblies to solar companies, eventually becoming a leading provider of Electrical Balance of System (EBOS) solutions. EBOS refers to all the components of a solar power system other than the panels themselves, which are crucial for gathering and transmitting electricity. A key moment was its initial public offering (IPO) in 2021, which provided funds to expand its product offerings and enter new markets like battery storage and data centers. The company has focused on creating prefabricated, plug-and-play systems that make solar project installation faster, safer, and more efficient.
What it actually does
Think of Shoals as providing the central nervous system for a large-scale solar farm. While solar panels get most of the attention, they need a complex network of cables, combiners, and fuses to safely and efficiently get the electricity they generate to the power grid. Shoals designs and manufactures these critical components, known as Electrical Balance of System (EBOS) solutions. Their products are like pre-assembled, heavy-duty extension cords and junction boxes that are simply plugged together on-site, reducing the need for highly specialized and time-consuming electrical work in the field. This makes building a solar project simpler and more reliable for the construction and engineering firms that are their main customers.
System Solutions
This is the company's main line of business, representing the largest portion of its revenue. It involves selling complete, pre-engineered product packages that include everything needed to manage the flow of electricity from solar panels. Their flagship product is the Big Lead Assembly (BLA), which combines multiple electrical wires into a single, overmolded unit that is easier and faster to install. Customers, who are typically the large firms that build solar projects, pay for these integrated systems because they reduce on-site labor costs and minimize potential installation errors.
Components and Other
Besides selling full systems, Shoals also sells individual parts and provides related services. This includes items like custom junction boxes, cable management solutions, and disconnects for solar panel manufacturers and other equipment makers (known as original equipment manufacturers, or OEMs). This segment also includes technical support services to assist customers during installation and operation. While smaller than their System Solutions business, it allows the company to serve a wider range of customers in the solar and energy storage industries.
What management is betting on now
Management is focused on expanding beyond its core utility-scale solar market into new, high-growth areas. A major priority is providing electrical infrastructure for battery energy storage systems (BESS) and data centers, which have massive and growing power needs. They are also investing heavily in American manufacturing, recently opening a large new facility in Tennessee to increase production capacity and automation. The strategy is to leverage their expertise in prefabricated electrical systems to capture a larger share of the entire energy transition market, including international growth.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$13.32M
FY2024 Q4
$12.46M
FY2025 Q1
$12.35M
FY2025 Q2
$-26.04M
FY2025 Q3
$8.97M
FY2025 Q4
$-11.25M
FY2026 Q1
$-49.10M
FY2026 Q2
$-207.00K
Revenue
$163.37M
Net income
$12.14M
Diluted EPS
0.07
Operating cash flow
$6.81M
Free cash flow
$-207.00K
Fetching…
Sources
Revenue
$140.56M
Net income
$-297.00K
Diluted EPS
0.00
Operating cash flow
$-41.45M
Free cash flow
$-49.10M
Fetching…
Sources
Revenue
$148.32M
Net income
$8.12M
Diluted EPS
0.05
Operating cash flow
$-4.09M
Free cash flow
$-11.25M
Fetching…
Sources
Revenue
$135.80M
Net income
$11.88M
Diluted EPS
0.07
Operating cash flow
$19.42M
Free cash flow
$8.97M
Fetching…
Sources
Revenue
$110.84M
Net income
$13.86M
Diluted EPS
0.08
Operating cash flow
$-13.82M
Free cash flow
$-26.04M
Fetching…
Sources
Revenue
$80.36M
Net income
$-282.00K
Diluted EPS
0.00
Operating cash flow
$15.56M
Free cash flow
$12.35M
Fetching…
Sources
Revenue
$106.99M
Net income
$7.82M
Diluted EPS
0.04
Operating cash flow
$13.99M
Free cash flow
$12.46M
Fetching…
Sources
Revenue
$102.17M
Net income
$-267.00K
Diluted EPS
0.00
Operating cash flow
$15.70M
Free cash flow
$13.32M
Fetching…
Sources
Is it cheap or expensive?
Fair value $5.64 vs current price $7.47
Wall Street consensus is the average analyst price target: $11.32 (100.7% higher than our fair-value estimate).
Our most-likely fair value is $5.64 a share — about 24.5% away from today's price of $7.47, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $218.1M. Interest coverage 5.6x.
Net debt
$218.09M
Interest coverage
5.64x
Shoals Technologies Group, Inc.'s profit covers its interest bill about 5.6 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Watch
Worse cushion
Baseline
Better cushion
SHLS
BASELINE
Shoals Technologies Group, Inc.
Total debt $233.81M Interest coverage 5.64x This is the baseline the peer rows are being compared against.
Total debt $752.89M Interest coverage 2.70x -52% vs SHLS Carries about 2.1x less debt cushion than SHLS.
Total debt $407.35M Interest coverage -19.64x -100% vs SHLS This peer has almost no interest-payment cushion compared with SHLS.
Total debt $613.36M Interest coverage 36.42x +546% vs SHLS Carries about 6.5x more debt cushion than SHLS.
Total debt $38.40M Interest coverage 265.83x +4,612% vs SHLS Carries about 47.1x more debt cushion than SHLS.
Total debt $24.27M Interest coverage -4.32x -100% vs SHLS This peer has almost no interest-payment cushion compared with SHLS.
What you should know
The case for and against SHLS
3 Rewards
2 Risks
Rewards
-
Revenue grew 23.7% last year.
-
Returns 5.3% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 5/10 years.
Risks
-
Operating margin compressed from 20.3% to 13.8% over 3 years.
-
Insider ownership is only 1.1% (peer median: 1.2%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
39.32x
Forward P/E
13.55x
P/B
2.04x
P/S
2.14x
EV/EBITDA
14.66x
PEG ratio
0.52x
Profitability
How much profit each dollar creates
Gross margin
32.1%
Operating margin
13.8%
Net margin
5.4%
ROE
5.3%
ROA
5.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.38x
Current ratio
2.25x
Quick ratio
1.05x
Total debt
$233.81M
Total cash
$15.72M
Growth
How the business has been compounding
Revenue TTM
$588.06M
Revenue 5Y CAGR
22.2%
EPS TTM
0.19
EPS 5Y CAGR
-38.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$-19.31M
Free CF TTM
$-15.98M
FCF margin
-2.7%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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