ARRY: Record Backlog And Policy Deadline Will Support Future Margin Recovery

Array Technologies' updated analyst price target edges lower to about $10.07 from $10.47. Analysts factor in softer margin assumptions and a higher discount rate following recent target cuts across several firms, despite ongoing strength in bookings and backlog.

Analyst Commentary

Recent research updates on Array Technologies show a mixed but active debate around valuation, execution and growth prospects following the latest earnings and guidance.

Bullish Takeaways

• Bullish analysts highlight strong Q4 bookings, revenue and record backlog as support for Array's growth profile, even as price targets move lower.
• Several firms keep positive ratings while trimming targets, suggesting they still see upside potential from current levels based on execution improvements and backlog visibility.
• Some research points to mid-teens growth guidance for 2026 and contribution from the APA acquisition as key pillars for a longer term growth case.
• Upgrades from firms citing improving execution, low investor expectations and a valuation gap versus peers indicate that some see current pricing as not fully reflecting growth prospects.

Bearish Takeaways

• Bearish analysts focus on softer margin assumptions, with several notes citing weaker EBITDA guidance and a softer margin profile as central concerns for valuation.
• Multiple price target cuts cluster around US$7 to US$11, reflecting a reset in expectations for profitability and returns, even where revenue or bookings are described as strong.
• Some research flags a messy product transition around the H250 product and backlog cleanup, with comments that backlog has been supported at the expense of margins.
• There is caution around value creation given reliance on acquisitions and the cost of preferred securities, which some analysts compare to a large share of 2026 EBITDA guidance.

What's in the News

• Array Technologies reported goodwill impairment charges of $102,560,000 for Q4 2025, compared with $74,000,000 a year earlier, which affects reported earnings quality and book value (Key Developments).
• The company issued earnings guidance for Q1 2026, calling for revenue of approximately $200,000,000, providing a reference point for near term sales expectations (Key Developments).
• Full year 2026 revenue guidance was set in a range of US$1.4b to US$1.5b, outlining the size of the business the company is targeting over the next year (Key Developments).

Valuation Changes

• Fair Value: The updated analyst fair value estimate has edged lower to $10.07 from $10.47.
• Discount Rate: The discount rate has risen slightly to 11.86% from 11.69%, implying a modestly higher required return in the model.
• Revenue Growth: The revenue growth assumption is now 8.99%, compared with 9.07% previously, indicating a slightly more conservative sales outlook.
• Net Profit Margin: The net profit margin assumption has eased to 4.78% from 5.17%, reflecting a softer profitability profile in forecasts.
• Future P/E: The future P/E multiple has increased to 27.10x from 25.89x, pointing to a higher valuation multiple being applied to projected earnings.