Is It Time To Revisit Array Technologies (ARRY) After Recent Share Price Pullback

• If you are wondering whether Array Technologies is starting to look like value at around US$6.80 per share, you are not alone. That question sits at the heart of this review.
• The stock has had a mixed run, with a 4.8% decline over the last 7 days, a sharper 41.4% decline over the last 30 days and a 29.8% decline year to date. Yet it still shows a 12.2% return over the last 1 year against much larger pullbacks of 61.8% over 3 years and 77.1% over 5 years.
• Recent coverage of Array Technologies has focused on its role as a solar tracking equipment provider and how sentiment around renewable energy spending is influencing interest in the stock. Together with the share price swings, this news flow has kept attention on how the business might be positioned within the broader solar supply chain.
• On our framework, Array Technologies currently holds a valuation score of 3 out of 6, which means it screens as undervalued on half of the checks we run. Next we will walk through those methods in detail before finishing with a more complete way to think about what that score really tells you.

Find out why Array Technologies's 12.2% return over the last year is lagging behind its peers.

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

A Discounted Cash Flow model projects a company’s future cash flows and then discounts them back to today’s value using a required rate of return. It is essentially asking what those future dollars are worth in today’s terms.

For Array Technologies, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections in $. The latest twelve months free cash flow sits at about $86.1 million. Analyst inputs extend out to 2030, where free cash flow is projected at $102.5 million, with years in between ranging from roughly $113 million to $146 million before tapering to the low $90 million range by 2035 using extrapolated estimates.

When all of these projected cash flows are discounted back and added together, the model arrives at an estimated intrinsic value of US$6.73 per share, very close to the current price around US$6.80. That implies the shares screen as about 1.0% overvalued on this framework, effectively within a margin of error.

Result: ABOUT RIGHT

Array Technologies is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

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 a business like Array Technologies, where earnings can be affected by non cash items and one off factors, P/S is a useful way to compare what investors are paying for each dollar of revenue. It strips the focus back to the top line rather than short term swings in profit.

In general, higher growth expectations and lower perceived risk support a higher “normal” P/S multiple. Slower expected growth or higher risk tend to line up with a lower multiple. So context really matters when you look at any single number.

Array Technologies currently trades on a P/S of 0.81x. That sits below the Electrical industry average P/S of 2.35x and also below the peer group average of 1.67x. Simply Wall St’s Fair Ratio for Array is 1.40x, which is the P/S level suggested by a model that looks at factors like earnings growth, profit margins, industry, market cap and company specific risks.

This Fair Ratio is more tailored than a simple comparison to peers or the industry, because it adjusts for the company’s own mix of growth, profitability and risk. Set against that 1.40x Fair Ratio, the current 0.81x P/S indicates that Array Technologies appears undervalued on this metric.

Result: UNDERVALUED

P/S ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 18 top founder-led companies.

Upgrade Your Decision Making: Choose your Array Technologies Narrative

Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you connect your view of Array Technologies to the numbers by writing a short story about the business, linking that story to assumptions for future revenue, earnings and margins, and then comparing the Fair Value that falls out of your forecast with today’s share price. This means two investors on the Community page can both be looking at the same company yet reach very different conclusions. For example, one Narrative might lean closer to a Fair Value of about US$15.00 based on higher revenue growth and margins, while another leans closer to about US$6.70 based on more cautious assumptions. As new news or earnings are added, your Narrative updates automatically so you can quickly see whether your story and Fair Value still line up with the current price.

For Array Technologies, here are previews of two leading Array Technologies Narratives to make comparison easier:

🐂 Array Technologies Bull Case

Fair value in this bullish Narrative: US$10.47 per share

Implied discount to this fair value at the recent US$6.80 share price: about 35.1%

Revenue growth assumption used: 9.07% a year

• Analysts in this view see Array benefiting from backlog strength, policy support and new products such as OmniTrack, SkyLink and Hail XP to support revenue and margin recovery over time.
• The Narrative focuses on industry demand for utility scale solar trackers, diversification into more regions and segments, and supply chain moves that aim to meet domestic content rules and regulatory requirements.
• Key risks flagged include tariff and policy uncertainty, high interest rates in some markets, exposure to low margin legacy contracts and the threat of tracker commoditization and tougher competition.

🐻 Array Technologies Bear Case

Fair value in this bearish Narrative: US$6.70 per share

Implied premium to this fair value at the recent US$6.80 share price: about 1.5%

Revenue growth assumption used: 0.33% a year

• The cautious view centers on regulatory uncertainty, rising input costs, trade policy risks and intense global competition that could keep revenue growth uneven and margins under pressure.
• This Narrative assumes relatively flat revenue over the next few years, with earnings progress helped by margin work but held back by factors such as tariffs, project delays and customer concentration.
• It highlights execution and integration challenges around products and acquisitions, along with the possibility that tracker hardware becomes more commoditized, which could weigh on pricing power over time.

Taken together, these Narratives frame the current share price between two very different sets of assumptions. Your next step is to decide which story feels closer to how you see Array Technologies developing and how that compares with your own expectations for risk and reward.

Curious how numbers become stories that shape markets? Explore Community Narratives

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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