Shoals Technologies Group, Inc. Just Missed Earnings - But Analysts Have Updated Their Models

Shoals Technologies Group, Inc. (NASDAQ:SHLS) shareholders are probably feeling a little disappointed, since its shares fell 8.8% to US$13.35 in the week after its latest full-year results. Revenues were in line with forecasts, at US$489m, although statutory earnings per share came in 13% below what the analysts expected, at US$0.24 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Shoals Technologies Group

After the latest results, the 19 analysts covering Shoals Technologies Group are now predicting revenues of US$508.6m in 2024. If met, this would reflect a credible 4.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 91% to US$0.45. In the lead-up to this report, the analysts had been modelling revenues of US$625.5m and earnings per share (EPS) of US$0.67 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shoals Technologies Group's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 20% to US$18.95. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Shoals Technologies Group at US$26.00 per share, while the most bearish prices it at US$10.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Shoals Technologies Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 7.8% 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 biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shoals Technologies Group. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Shoals Technologies Group. Long-term earnings power is much more important than next year's profits. 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..

Before you take the next step you should know about the 1 warning sign for Shoals Technologies Group that we have uncovered.

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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.