ARRY: Record Backlog And July Safe Harbor Deadline Will Drive Repricing

Array Technologies' updated analyst price target edges slightly lower to around $10.04 from $10.07, as analysts factor in reduced margin assumptions and lower future P/E expectations following mixed post earnings revisions, even as bookings and backlog remain key focal points in recent research.

Analyst Commentary

Recent research around Array Technologies points to a split view, with several firms trimming price targets after the latest earnings update while still highlighting areas of potential strength. Others are more cautious, focusing on margins, guidance and the quality of growth.

Bullish Takeaways

• Bullish analysts see the sharp share price reset of about 33% after earnings as creating a discount to peers, which they view as meaningful relative to the company’s record backlog.
• Some research points to strong Q4 bookings and revenue and references mid-teens growth guidance for 2026 supported by the APA acquisition as support for a constructive long term growth narrative.
• There is continued focus on management’s aim to return to a high teens EBITDA profile, with several bullish analysts describing their stance as cautiously optimistic even after moderating valuation assumptions.
• Certain firms highlight improving execution, low investor expectations and a valuation gap versus peers as reasons to take a more positive stance, especially with specific industry timing catalysts such as the July 4 safe harbor deadline being flagged.

Bearish Takeaways

• Bearish analysts emphasize cuts to price targets across the board, with multiple firms resetting their targets into the US$7 to US$11 range and one firm moving its rating to Hold, signaling more muted upside assumptions.
• Several reports flag softer than expected margin guidance and a soft margin profile for 2026, with some pointing out that steps to shore up backlog have come at the expense of margins, which feeds into more conservative P/E and EBITDA expectations.
• Updates to models post earnings often center on mixed Q4 results, including strong bookings but margin guidance that missed expectations, and lower forward guidance even as bookings remain strong.
• Some bearish analysts question the quality of growth, pointing to a messy product transition around the H250 product, the removal of significant STI backlog, and the view that a significant portion of historic growth has come from acquisitions while the cost of preferred equity remains a large share of 2026 EBITDA guidance.

What's in the News

• Array Technologies reported goodwill impairment charges of $102,560,000 for the fourth quarter ended December 31, 2025, compared with $74,000,000 a year earlier (Key Developments).
• The company issued earnings guidance for the first quarter of fiscal 2026, with revenue expected to be approximately $200,000,000 (Key Developments).
• For full year 2026, Array Technologies expects revenue in the range of $1.4b to $1.5b (Key Developments).

Valuation Changes

• Fair Value: trimmed slightly from $10.07 to $10.04, reflecting modestly lower model assumptions.
• Discount Rate: reduced from 11.86% to 11.17%, implying a somewhat lower required return in the updated analysis.
• Revenue Growth: adjusted marginally higher from 8.99% to 9.18%, signaling a small change in expected top line expansion.
• Net Profit Margin: moved slightly higher from 4.78% to 4.81%, indicating a very small shift in projected profitability.
• Future P/E: eased from 27.10x to 26.27x, pointing to a modest compression in the valuation multiple used in forecasts.