Thurtell/E+ via Getty Images
A Quick Take On Shoals Technologies Group
Shoals Technologies Group (SHLS) went public in February 2021, with the company and parent entity raising approximately $1.9 billion in gross proceeds.
The firm provides electrical balance of systems products for solar projects, energy storage, and electric vehicle charging infrastructure.
Given the firm’s growing backlog, growth potential, and this outlook, SHLS may be a buying opportunity for patient investors who agree that supply chain issues are temporary.
My outlook is a Buy on SHLS at $12.25.
Company
Portland, Tennessee-based Shoals was founded to develop advanced electrical balance of system [EBOS] solutions for large scale solar energy projects.
Management is headed by CEO and CTO Jason Whitaker, who has been with the firm since 2009 and was previously Co-owner at Thunder Heart Performance Corp. and holds a Mechanical Engineering degree.
The company’s primary offerings include:
The firm sells its products primarily to engineering, procurement and construction firms [EPCs] that build solar energy projects.
However, the decision on product choices is usually made between the EPC and the project owner, ‘given the mission critical nature of EBOS.’
Market & Competition
According to a 2020 market research report by Technavio, the global market for solar PV balance of systems is expected to grow by $42.2 billion from 2020 to 2024.
This represents a forecast CAGR of 16% from 2020 to 2024.
The main drivers for this expected growth are increasing regional investments in alternative energy solar power projects as system costs come down.
Also, 64% of the growth is expected to come from the APAC region.
Major competitive or other industry participants include:
Other industry participants include:
Shoals’ Recent Financial Performance
5-Quarter Total Revenue (Seeking Alpha and The Author)
5-Quarter Gross Profit (Seeking Alpha and The Author)
5-Quarter Operating Income (Seeking Alpha and The Author)
5-Quarter Earnings Per Share (Seeking Alpha and The Author)
(Source data for above GAAP financial charts)
In the past 12 months, SHLS’s stock price has dropped 69 percent vs. the U.S. S&P 500 index’s rise of 11 percent, as the chart below indicates:
52-Week Stock Price (Seeking Alpha)
(Source)
Valuation Metrics For Shoals
Below is a table of relevant capitalization and valuation figures for the company:
|
Measure |
Amount |
|
Market Capitalization |
$1,290,000,000 |
|
Enterprise Value |
$1,520,000,000 |
|
Price/Sales |
6.28 |
|
Enterprise Value/Sales |
7.45 |
|
Enterprise Value/EBITDA |
28.51 |
|
Free Cash Flow [TTM] |
$11,890,000 |
|
Revenue Growth Rate [TTM] |
16.76% |
|
Earnings Per Share |
$0.03 |
(Source)
…….
Source: https://seekingalpha.com/article/4489527-shoals-technologies-could-be-bargain-for-patient-investors