Shoals Technologies Group (NASDAQ:SHLS) Issues Quarterly Earnings Results, Beats Estimates By $0.01 EPS

Key Points

• Shoals reported a beat with $0.07 EPS vs. consensus $0.06 and revenue of $140.6M (vs. $129.2M expected), up ~74% year‑over‑year, and disclosed a record backlog/awarded orders of $758M with a quote pipeline exceeding $1B.
• Adjusted gross margin came in below expectations at 29.6% due to product mix, tariffs, higher freight and temporary labor from a factory move, which management called the quarter’s margin low point and said should improve sequentially.
• Management raised full‑year guidance to $600–$640M revenue and $118–$132M adjusted EBITDA; however, operating cash use was $41.4M to build inventory, leaving cash of $1.9M and net debt of $179.9M, with a planned moderate revolver expansion to support working capital.

Shoals Technologies Group (NASDAQ:SHLS - Get Free Report) issued its quarterly earnings data on Tuesday. The company reported $0.07 EPS for the quarter, topping analysts' consensus estimates of $0.06 by $0.01, FiscalAI reports. The firm had revenue of $140.56 million for the quarter, compared to analyst estimates of $129.16 million. Shoals Technologies Group had a net margin of 7.06% and a return on equity of 9.10%. The business's quarterly revenue was up 74.4% on a year-over-year basis.

Here are the key takeaways from Shoals Technologies Group's conference call:

• First-quarter revenue beat guidance at $141 million (up 75% YoY) with a record backlog and awarded orders (BLAO) of $758 million after adding roughly $151 million of new orders and a quote pipeline exceeding $1 billion.
• Adjusted gross margin came in slightly below expectations at 29.6%, citing product mix, tariffs, higher freight and temporary labor inefficiencies from the factory move—management calls Q1 the gross‑margin low point but expects sequential improvement.
• Management raised guidance, now expecting full‑year revenue of $600–$640 million and adjusted EBITDA of $118–$132 million, with Q2 revenue guide of $150–$170 million.
• Operating cash use was $41.4 million in Q1 to build inventory for demand, leaving cash and equivalents at $1.9 million and net debt at $179.9 million (net debt/adj. EBITDA ~1.6x); the company plans a moderate revolver expansion to support working capital.
• Legal/IP update is mixed— the ITC declined to review contested ALJ issues (encouraging; final determination due in early June), while SG&A included ~$6.2 million of ongoing legal costs and a proposed class‑action settlement had a ~$5 million net impact on GAAP results.

Shoals Technologies Group Trading Up 3.2%

Shares of SHLS traded up $0.27 on Tuesday, reaching $8.54. 3,781,356 shares of the company's stock were exchanged, compared to its average volume of 4,957,865. The company has a current ratio of 2.03, a quick ratio of 1.32 and a debt-to-equity ratio of 0.23. The stock has a market capitalization of $1.43 billion, a P/E ratio of 42.21, a price-to-earnings-growth ratio of 0.93 and a beta of 1.74. The business has a 50 day moving average price of $6.81 and a two-hundred day moving average price of $8.38. Shoals Technologies Group has a 12 month low of $3.81 and a 12 month high of $11.36.

Analyst Ratings Changes

A number of brokerages have recently issued reports on SHLS. The Goldman Sachs Group reiterated a "buy" rating on shares of Shoals Technologies Group in a research report on Monday, February 9th. Wells Fargo & Company dropped their price objective on shares of Shoals Technologies Group from $10.00 to $9.00 and set an "equal weight" rating for the company in a research report on Wednesday, February 25th. Citigroup reduced their price objective on Shoals Technologies Group from $11.00 to $8.50 and set a "neutral" rating on the stock in a report on Thursday, February 26th. Jefferies Financial Group decreased their price objective on Shoals Technologies Group from $10.00 to $8.00 and set a "buy" rating on the stock in a research report on Wednesday, March 11th. Finally, Morgan Stanley lowered their target price on Shoals Technologies Group from $9.50 to $8.50 and set an "equal weight" rating for the company in a research note on Wednesday, February 25th. Ten investment analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, Shoals Technologies Group has a consensus rating of "Moderate Buy" and an average target price of $9.43.

Institutional Trading of Shoals Technologies Group

Institutional investors have recently bought and sold shares of the business. Dynamic Technology Lab Private Ltd bought a new stake in shares of Shoals Technologies Group during the 1st quarter valued at $57,000. Tower Research Capital LLC TRC lifted its stake in shares of Shoals Technologies Group by 468.3% in the 2nd quarter. Tower Research Capital LLC TRC now owns 15,519 shares of the company's stock valued at $66,000 after purchasing an additional 12,788 shares during the period. CIBC Asset Management Inc bought a new position in shares of Shoals Technologies Group in the 4th quarter worth $85,000. Canada Pension Plan Investment Board grew its stake in shares of Shoals Technologies Group by 13.0% during the second quarter. Canada Pension Plan Investment Board now owns 20,200 shares of the company's stock worth $86,000 after purchasing an additional 2,316 shares during the period. Finally, Cibc World Markets Corp acquired a new stake in shares of Shoals Technologies Group during the fourth quarter worth $95,000.

Shoals Technologies Group Company Profile

Shoals Technologies Group, Inc is a leading provider of electrical balance-of-system (BOS) solutions for the solar energy industry. The company designs, engineers and manufactures a comprehensive portfolio of products, including junction boxes, combiner boxes, cable assemblies, power distribution units and monitoring systems. These components are critical to interconnecting photovoltaic modules, optimizing energy output and ensuring safe, reliable performance across solar installations.

Founded in 1996 and headquartered in Portland, Tennessee, Shoals has grown its manufacturing and operations footprint to serve customers around the globe.

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