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Shoals Technologies Group Inc. (NASDAQ: SHLS) is an Electrically Balanced System (EBOS) solution provider. Sunenergy storage, and Electric car (EV) infrastructure industry. EBOS from all components of the photovoltaic system solar panel. This includes cables, inverters, splice boxes, wireless monitoring systems and junction boxes. Competitors in this segment include: First Solar Inc. (NASDAQ: FSLR), Eaton Corp. Plc (NYSE: ETN) and Emeren Group, Inc. (NASDAQ: SOL).
Photovoltaic project support
Scholl streamlines the assembly and installation of large-scale solar projects. The company also provides product and engineering support, supply chain management, and support services. They sell and contract to engineering, procurement and construction companies (EPCs) responsible for large-scale solar projects.
Solid backlog and awards
Shoals has proven to be a strong value proposition with 20%-30% installation cost and time savings and has been launched in over 15 states. The company’s Big Lead Assembly (BLA) product integrates multiple functions into his single unit. This reduces the number of field connections, saves time and labor costs, and enhances system reliability. The company converted 6 EPCs into a “bond-as-you-go” system for 42 clients and 15 clients in transition. Demand for shawls remains strong. unfinished business Prize money was $527.5 million, up 75% year-on-year.
beat and raise
On May 8, 2023, Shoals announced its first quarter 2023 financial results for the quarter ending March 2023. The company reported earnings per share (EPS) of $0.14, excluding non-recurring items, beating analyst consensus expectations of $0.10. , beats for $0.04. Revenue rose 55% year-over-year to a record $105.09 million, versus analyst consensus forecasts of $97.56 million. Sales of system solutions increased 95% year-on-year, accounting for his 87% of total revenue, up from 69%. Net income increased 286% to $17 million from $4.6 million in the same period last year.
Gross margin increased 720 bps to 45.9% and Adjusted EBITDA margin increased 1,000 bps to 34.4%. Margin growth was driven by increased fixed cost utilization, higher mix of system solutions revenues and improved operating efficiencies.
Shoals Interim CEO Jeff Torner said: The company increased revenue by 55% year-on-year, and System Solutions revenue increased by 95% year-on-year, contributing to a significant increase in gross margin. ”
Raising full-year 2023 outlook
Sholes expects full-year 2023 revenue to rise from $470 million to $510 million to $480 million to $510 million. Revenue is $491.84 million, according to analyst consensus estimates. Adjusted EBITDA is expected to be $145 million to $160 million. Adjusted net income is expected to be between $92 million and $102 million.
Analyst action
On May 9, 2023, Guggenheim upgraded Scholes shares to buy from neutral with a price target of $30. Northland Capital upgraded SHLS to Outperform with a $30 price target. Shoals Technologies Group Analyst Rating and Price Target Located on Market Beat.
weekly descending triangle
The SHLS weekly candlestick chart has been in a descending triangle since peaking at $33.43 in November 2021. The weekly Stochastic continued to reject a pullback until the SHLS made a swing low at $18.38 to form a flat and then fell to the 20 band. The trend line below the triangle. The stock triggered a daily market structure low (MSL) breakout to $20.27 before rebounding to lower highs at $23.83. Each successive rally reaches lower highs and forms a triangular descending diagonal trendline.
SHLS shares broke below the weekly 20-period exponential moving average (EMA) of $22.84 and the 50-period moving average (MA) of $22.86, crossing the flat-bottom trendline to make a new swing low at $17.32. Stocks rallied heading into Q1 2023 earnings reports as the breakdown of the weekly descending triangle began to form, but widened after the explosive numbers.
SHLS will attempt to break out of the descending triangle above $22.86 as weekly stochastics attempt to cross back towards the 40 band. Pullback support levels are at $20.27 for the weekly MSL trigger, with lowers at $19.01, $18.38, and $17.32.