Company Reports

We attended the RE+ conference and trade show in Anaheim, California. The conference and exhibit hall provided an opportunity to meet with companies as well as see latest product unveilings. We highlight our key takeaways below.

Shoals' Sept. 5 investor day highlighted a strategic plan targeting a diversification beyond US utility-scale solar as well as long-term financial guidance.

On Sept. 3 no-moat Shoals' shares rose 16% after it received a favorable legal ruling from the US International Trade Commission, or ITC, in its patent infringement complaint against Voltage, LLC. We view the update as a positive but leave our $5 fair value estimate unchanged as we await the company's investor day later this week. We view shares as fairly valued.

Shoals has crafted a market-leading position in the solar electrical balance of system market. EBOS is a lesser-known segment of solar and comprises components transferring electrical current from solar modules to an inverter. The main EBOS customers are engineering, procurement, and construction firms building solar projects.

We are lowering our fair value estimate for no-moat Shoals to $5 from $7 following second-quarter results. The reduced valuation is a result of lower long-term revenue assumptions, which results in reduced operating leverage and lower long-term margins. We view shares as fairly valued.

We lower our fair value estimate for no-moat Shoals Technologies to $7 per share from $10 following first-quarter results. The driver of our lower valuation is a reduced revenue forecast primarily due to lower average selling prices. We view the shares, which are trading down 12% at the time of writing, as fairly valued.

Shoals has crafted a market-leading position in the solar electrical balance of system market. EBOS is a lesser-known segment of solar and comprises components transferring electrical current from solar modules to an inverter. The main EBOS customers are engineering, procurement, and construction firms building solar projects.

We lower our fair value estimate for no-moat Shoals to $10 from $11 following fourth-quarter results. The driver of our lower valuation is a reduced revenue forecast following 2024 guidance below our expectations. We view shares as overvalued.

Shoals has crafted a market-leading position within the solar electrical balance-of-system, or EBOS, market. EBOS is a lesser-known segment of solar and comprises components transferring electrical current from solar modules to an inverter. The main customers of EBOS are engineering, procurement, and construction firms building solar projects.

Clean energy stocks have had a roller-coaster 18 months. Optimism following the passage of the Inflation Reduction Act in August 2022 gave way to rising interest rates in 2023. We highlight three key themes for investors to focus on in 2024: interest rates, U.S. policy, and profitability.

We lower our fair value estimate for no-moat Shoals to $11 from $15 following third-quarter results. The driver of our lower valuation is a higher percentage of our long-term revenue from the company’s lower-margin components segment as growth slows in its higher-margin system solutions segment. We view shares as overvalued.

Shoals has crafted a market-leading position within the solar electrical balance-of-system, or EBOS, market. EBOS is a lesser-known segment of solar and comprises components transferring electrical current from solar modules to an inverter. The main customers of EBOS are engineering, procurement, and construction firms building solar projects.

We lower our fair value estimate for Shoals to $15 from $20 following recent discussions and after reevaluating our financial forecast. The biggest driver of our lower valuation is slower growth estimates for the company's Big Lead Assembly, or BLA, solution in the U.S. market. We see shares as overvalued.

Shoals has crafted a market-leading position within the solar electrical balance-of-system, or EBOS, market. EBOS is a lesser-known segment of solar and comprises components transferring electrical current from solar modules to an inverter. The main customers of EBOS are engineering, procurement, and construction firms building solar projects.

We maintain our $20 per share fair value estimate for no-moat Shoals following its second-quarter earnings. We leave our 2023 and long-term financial estimates largely unchanged and see shares as slightly overvalued.

Shoals has crafted a market-leading position within the solar electrical balance-of-system, or EBOS, market. EBOS is a lesser-known segment of solar and comprises components transferring electrical current from solar modules to an inverter. The main customers of EBOS are engineering, procurement, and construction firms building solar projects.

We maintain our $20 fair value estimate for no-moat Shoals after it announced the appointment of a new CEO as well as a large commercial agreement. We view shares as overvalued.

We maintain our $20 per share fair value estimate for no-moat Shoals following its first-quarter earnings. While we raise our 2023 estimates following the company's increased guidance, our long-term financial expectations are largely unchanged. We view shares as fairly valued.

Shoals reported fourth-quarter results and unveiled its 2023 outlook, which was in line with our expectations. We maintain our $20 fair value estimate given limited changes to our prior forecast and view shares as overvalued. We remain impressed by Shoals' near-term margin profile but have concerns on the durability of these margins given our no-moat rating.

We maintain our $20 fair value estimate for Shoals following news of its CEO succession plan and the launch of a 20 million-share offering. We continue to view shares as overvalued despite the share price drop.