Is It Time To Reassess Array Technologies (ARRY) After A 61.6% One Year Rally?

• Wondering whether Array Technologies at US$8.11 is offering value or just noise? This article walks through what the current price might be saying about the stock.
• Over the short term, the share price move of 3.6% over 7 days and 4.9% over 30 days sits alongside a 16.2% decline year to date and a 61.6% return over the last year. Taken together, this gives you a very mixed picture.
• These moves come as Array Technologies continues to sit in a solar and renewables theme that regularly attracts attention, with sentiment often shifting quickly as investors reassess growth expectations and project pipelines. That backdrop helps explain why the stock can show strong 1 year returns while still carrying deep 3 year and 5 year drawdowns of 60.3% and 71.2%.
• On Simply Wall St's model, Array Technologies holds a valuation score of 3/6. The rest of this article walks through how different valuation approaches land on that result, before finishing with a way to think about value that goes beyond just the numbers.

Find out why Array Technologies's 61.6% return over the last year is lagging behind its peers.

Approach 1: Array Technologies Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of a company’s future cash flows and discounts them back to today using a required rate of return. The idea is simple: a dollar of cash flow in the future is worth less than a dollar received today, so those future figures are adjusted to get an intrinsic value per share.

For Array Technologies, Simply Wall St uses a 2 Stage Free Cash Flow to Equity model based on Free Cash Flow, or FCF. The latest twelve month FCF is about US$86.1 million. Analyst inputs run through 2030, with projected FCF of US$102.5 million in that year, and additional years extrapolated by Simply Wall St to complete a ten year path of cash flows.

After discounting all those projected cash flows, the model lands on an estimated intrinsic value of about US$7.03 per share. Against the current share price of US$8.11, that implies the stock is about 15.4% overvalued on this DCF view.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Array Technologies may be overvalued by 15.4%. Discover 56 high quality undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Array Technologies.

Approach 2: Array Technologies Price vs Sales

For companies where revenue is a key reference point and earnings or book value are less straightforward, the P/S ratio can be a useful way to think about value. It tells you how much you are paying for each dollar of sales, which is often a cleaner yardstick when profits are volatile or accounting items cloud the picture.

What counts as a “normal” P/S ratio depends on how quickly revenue is expected to grow and how risky the cash flows are. Higher growth and lower perceived risk can justify a higher multiple, while slower growth or higher risk usually points to a lower one.

Array Technologies currently trades on a P/S ratio of 0.97x, compared with an Electrical industry average of 2.51x and a peer average of 2.14x. Simply Wall St also calculates a proprietary “Fair Ratio” of 1.37x for Array Technologies, which aims to reflect a suitable P/S after considering factors such as earnings growth, profit margins, industry, market cap and company specific risks. Because it adjusts for these elements rather than just lining the company up against broad peer or industry averages, the Fair Ratio is designed to give a more tailored benchmark. On this view, Array Technologies’ current 0.97x P/S sits below the 1.37x Fair Ratio. This indicates that the shares may appear undervalued on a sales basis.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Array Technologies Narrative

Earlier it was mentioned that there is an even better way to think about value, so this is where Narratives come in, letting you attach a clear story about Array Technologies to the hard numbers by linking your view on its future revenue, earnings and margins to a forecast and then to a Fair Value that you can compare with today’s price.

On Simply Wall St’s Community page, Narratives are an accessible tool used by millions of investors to set out their own story for a company, which then powers a live model that updates automatically when fresh information such as earnings, news or guidance arrives.

For Array Technologies, one investor might build a more optimistic Narrative that lines up with a higher Fair Value such as US$15.00, while another might lean toward a cautious Narrative closer to US$7.00. Comparing each of those Fair Values with the current share price can help you decide whether the price on screen fits your own story before you choose to buy, hold or sell.

For Array Technologies, here are previews of two leading Array Technologies Narratives:

The first is a bullish take that focuses on backlog, product adoption and policy support for utility scale solar. The second is a bearish view that focuses on margins, project risk and competition. Comparing them side by side can help you decide which story feels closer to your own expectations before you act on the current US$8.11 share price.

🐂 Array Technologies Bull Case

Fair value in this bullish Narrative: US$10.04 per share.

At a last close of US$8.11, that is about 19.2% below the Narrative fair value.

Analyst revenue growth input used in this Narrative: 9.18% a year.

• Backlog, product mix and new offerings such as OmniTrack, SkyLink and Hail XP are central to the view that revenue and earnings can build over time.
• Expansion into new regions and segments, plus moves such as engineered foundation solutions and the pending APA Solar acquisition, are used to support a larger addressable market and steadier margins.
• The risks list is long, including tariffs, policy shifts, legacy low margin contracts and potential commoditisation of trackers, so the story still relies on Array managing these pressures effectively.

🐻 Array Technologies Bear Case

Fair value in this bearish Narrative: US$7.00 per share.

At a last close of US$8.11, that is about 15.9% above the Narrative fair value.

Bearish revenue growth input used in this Narrative: 6.52% a year.

• This view accepts ongoing demand for solar trackers but places more weight on regulatory uncertainty, tariffs and higher input costs that could keep margins under pressure.
• International growth is treated as less dependable because of higher rates and macro risks, while project cancellations and customer concentration are seen as sources of uneven revenue.
• To support the bearish fair value, this Narrative still requires earnings to improve but assumes a high 50.3x P/E in 2029, which the author views as hard to support if margin and execution risks persist.

If you want to see how other investors are interpreting these factors for Array Technologies, you can review the full range of Community views, compare the inputs that sit behind each Fair Value and decide which Narrative feels closest to your own expectations before you buy, hold or sell.

See what the community is saying about Array Technologies

Do you think there's more to the story for Array Technologies? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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