S&P 500   5,130.95
DOW   38,989.83
QQQ   444.02
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S&P 500   5,130.95
DOW   38,989.83
QQQ   444.02
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Critical asset just had biggest fall on record (Ad)
How major US stock indexes fared Monday, 3/4/2024
Macy's, United Rentals rise; Apple, Spirit Airlines fall Monday, 3/4/2024
Critical asset just had biggest fall on record (Ad)
DeSantis names Disney World district administrator to run elections in Democratic Orange County
Stock market today: World markets are lower after China unveils 5% economic growth target for 2024
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Ohio foundation begins process to distribute millions in opioid settlement money
Closing prices for crude oil, gold and other commodities
S&P 500   5,130.95
DOW   38,989.83
QQQ   444.02
5 Under-the-Radar Artificial Intelligence (AI) Stocks
Critical asset just had biggest fall on record (Ad)
How major US stock indexes fared Monday, 3/4/2024
Macy's, United Rentals rise; Apple, Spirit Airlines fall Monday, 3/4/2024
Critical asset just had biggest fall on record (Ad)
DeSantis names Disney World district administrator to run elections in Democratic Orange County
Stock market today: World markets are lower after China unveils 5% economic growth target for 2024
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Ohio foundation begins process to distribute millions in opioid settlement money
Closing prices for crude oil, gold and other commodities
S&P 500   5,130.95
DOW   38,989.83
QQQ   444.02
5 Under-the-Radar Artificial Intelligence (AI) Stocks
Critical asset just had biggest fall on record (Ad)
How major US stock indexes fared Monday, 3/4/2024
Macy's, United Rentals rise; Apple, Spirit Airlines fall Monday, 3/4/2024
Critical asset just had biggest fall on record (Ad)
DeSantis names Disney World district administrator to run elections in Democratic Orange County
Stock market today: World markets are lower after China unveils 5% economic growth target for 2024
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Ohio foundation begins process to distribute millions in opioid settlement money
Closing prices for crude oil, gold and other commodities

Solar-Industry Small Cap Array Set For Big EPS Growth In 2023

Solar-Industry Small Cap Array Set For Big EPS Growth In 2023Any time an industry is home to top-performing stocks, there’s always opportunity among companies that operate in industries related to the industry’s big names. Array Technologies NASDAQ: ARRY makes the ground-mounting systems used in solar energy installations. 

Key Points

  • Array has posted a gain of 30.96% in the past three months, far surpassing the most appropriate benchmark, the S&P 600 small-cap index.
  • Analysts see the company growing year-over-year earnings and revenue when it reports on November 8.
  • Wall Street has a "moderate-buy" rating on the stock and a price target of $22.38, a potential upside of 39.64%. 
  • 5 stocks we like better than Array Technologies

Sure, solar companies like large-cap Enphase NASDAQ: ENPH and mid-cap First Solar NASDAQ: FSLR get more attention than Array, which has a market cap of just $2.4 billion.

Within the solar energy sub-industry, those are the only two U.S.-listed companies outperforming Array at the moment, and only by slim margins. 

Array has posted a gain of 30.96% in the past three months, far surpassing the most appropriate benchmark, the S&P 600 small-cap index, tracked by ETFs such as the SPDR Portfolio S&P 600 Small Cap ETF NYSEARCA: SPSM

That index has dropped 20.95% year to-date. In contrast, Array is up 2.17% in 2022. That’s not so much to cheer about, but the not-so-distant future for Array could potentially bring more gains, if analysts are correct and if tax incentives deliver the punch that’s expected. 

Array qualifies as a newly public company, having made its public-markets debut exactly two years ago, in October 2020. That’s an encouraging sign, as companies often post some of their biggest price gains within the first several years of going public.

Like other companies in the solar industry, Array is well positioned to get a boost from sales due to the Inflation Reduction Act, which includes incentives for adding solar panels to businesses and residences. 

Albuquerque, New Mexico-based Array doesn’t make panels, but instead focuses on mechanical gear that helps maximize the panels’ performance. 


Gear Helps Panels Generate More Power 

Array is among the biggest makers of gear called trackers, which align solar panels to capture the best angle toward the sun. This adjustment allows the panels to generate as much as 25% more power than more conventional mounting gear. 

According to the company’s IPO filing, trackers also deliver a 22% lower levelized cost of energy than “fixed tilt” mounting systems. Trackers cost less than ground-mounted solar projects. The company also said that about “70% of all ground-mounted solar energy projects constructed in the U.S. during 2019 utilized trackers,” according to its sources.  

Other publicly listed companies that make trackers include two small companies, Beam Global NASDAQ: BEEM, which has a market cap of just $121 million and FTC Solar NASDAQ: FTCI, which checks in at $205 million. 

Neither of those companies is profitable, although FTC is expected to book net income of $0.26 per share next year, and Beam has been growing revenue at a fast clip in recent quarters.

Analysts See 2022 Earnings Growth

Array has been profitable since 2019, but has an uneven history of earnings growth. Earnings dropped sharply in 2021, but Wall Street sees that trend reversing this year, expecting $0.31 per share for the full year, an increase of 31%. In 2023, analysts see earnings rising another 206%, to $0.95 per share. 

According to MarketBeat earnings data for Array, the company has an uneven history when it comes to meeting or missing net income and revenue views. However, it beat both top- and bottom-line views in the past two quarters. 

While a company’s earnings history matters, and can have some predictive value, the new tax incentives as part of the recently passed climate bill could be a game changer for Array and other solar companies. 

Toward that end, analysts have a “moderate buy” rating on the stock and a price target of $22.38, a potential upside of 39.64%. 

Array’s chart shows a correction that began in August, as the stock pulled back from a high of $24. Shares closed Tuesday at $16.03, up $0.89, or 5.88%. But a gap-up in late July, followed by another on August 10 still combine to create that three-month gain.

When the company reports its third quarter on November 8, after the bell, Wall Street expects earnings of $0.10 per share on revenue of $397.18 million. Both would be significant year-over-year increases. 

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Should you invest $1,000 in Array Technologies right now?

Before you consider Array Technologies, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Array Technologies wasn't on the list.

While Array Technologies currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Array Technologies (ARRY)
3.8481 of 5 stars
$13.32-5.8%N/A24.67Hold$21.41
Enphase Energy (ENPH)
4.866 of 5 stars
$123.97-4.4%N/A40.51Moderate Buy$153.65
First Solar (FSLR)
4.986 of 5 stars
$156.70-0.9%N/A20.25Moderate Buy$232.48
Beam Global (BEEM)
1.1152 of 5 stars
$6.89-3.1%N/A-3.98Moderate Buy$25.00
FTC Solar (FTCI)
2.3209 of 5 stars
$0.50-0.6%N/A-0.93Moderate Buy$2.17
SPDR Portfolio S&P 600 Small Cap ETF (SPSM)N/A$41.79-0.5%1.22%10.31N/AN/A
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Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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