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 offers peer-leading margins and returns on invested capital in the solar industry.
Shoals’ business is concentrated, with substantially all of its revenue tied to US ground-mount solar market.
|
Metric
|
SHLS
|
SEDG
|
FSLR
|
|---|---|---|---|
Price/Earnings (Normalized) | 11.18 | 14.50 | 19.61 |
Price/Book Value | 2.36 | 1.39 | 2.96 |
Price/Sales | 2.75 | 1.13 | 5.76 |
Price/Cash Flow | 9.48 | 15.97 | 14.98 |
|
Metric
|
SHLS
|
SEDG
|
FSLR
|
|---|---|---|---|
Quick Ratio | 1.78 | 1.85 | 1.68 |
Current Ratio | 2.62 | 3.70 | 2.41 |
Interest Coverage | 2.87 | 12.42 | 48.23 |
|
Metric
|
SHLS
|
SEDG
|
FSLR
|
|---|---|---|---|
Return on Assets (Normalized) | 11.03% | −0.77% | 11.21% |
Return on Equity (Normalized) | 17.17% | −1.44% | 17.01% |
Return on Invested Capital (Normalized) | 14.75% | −1.05% | 14.64% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
FSLR
| First Solar Inc | Vzqthbm | Qww | $20.7 Bil | |
ENPH
| Enphase Energy Inc | Xxglkwkmw | Cqk | $15.1 Bil | |
XNYIF
| Xinyi Solar Holdings Ltd | — | Ppfssx | $6.7 Bil | |
XISHY
| Xinyi Solar Holdings Ltd ADR | — | Fqjkjmy | $6.7 Bil | |
NXT
| NEXTracker Inc Ordinary Shares - Class A | Jfklyywh | Cfkr | $6.0 Bil | |
GCPEF
| GCL Technology Holdings Ltd | — | Bgjzw | $4.5 Bil | |
SEDG
| SolarEdge Technologies Inc | Ybyzktsy | Xnj | $2.8 Bil | |
RUN
| Sunrun Inc | Ydcjczpm | Szljz | $2.8 Bil | |
SPWR
| SunPower Corp | Hky | Jdgs | $403.6 Mil |
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