Analysts Are More Bearish On Shoals Technologies Group, Inc. (NASDAQ:SHLS) Than They Used To Be

The latest analyst coverage could presage a bad day for Shoals Technologies Group, Inc. (NASDAQ:SHLS), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, Shoals Technologies Group's 18 analysts are now forecasting revenues of US$502m in 2024. This would be a reasonable 2.6% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to bounce 92% to US$0.45. Previously, the analysts had been modelling revenues of US$626m and earnings per share (EPS) of US$0.67 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for Shoals Technologies Group

The consensus price target fell 20% to US$18.85, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shoals Technologies Group's past performance and to peers in the same industry. We would highlight that Shoals Technologies Group's revenue growth is expected to slow, with the forecast 2.6% annualised growth rate until the end of 2024 being well below the historical 29% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.0% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Shoals Technologies Group.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Shoals Technologies Group's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Shoals Technologies Group.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Shoals Technologies Group going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.