By Senad Karaahmetovic
Shoals Technologies (NASDAQ:SHLS) shares are up 15% today after the company reported strong results for its third quarter.
Shoals reported an EPS of $0.10 on revenue of $90.8 million, ahead of the Street consensus that called for an EPS of $0.08 on revenue of $83.03M.
On the guidance front, Shoals expects to see full-year revenue between $310M and $325M, better than the consensus of $313M. The adjusted EBITDA is seen at $83M (the midpoint), up from the prior guidance of $81.5M.
“The two-year tariff exemption for Chinese solar panels, the recently passed Inflation Reduction Act and higher energy prices have given our customers and end-users the confidence to reinitiate previously delayed projects, make multi-year commitments to invest in solar generation and prioritize product availability and performance over price,” the company stated.
Northland Capital Markets analysts raised Shoals to Outperform with a price target of $30 per share. Despite a “limited read-through into 2023,” the analysts said SHLS delivered strong results.
“While it's easy to say "Of course this was positive! The stock jumped ~20% in aftermarket trading!" we see details from the call providing a basis for a more fundamentally sustained and prolonged positive outlook for the stock on a longer-term basis,” they said in an upgrade note.
The analysts urged clients to buy the SHLS stock at these levels and be a “strong buyer on any pullback”.
Oppenheimer analysts said Shoals’ results showed strong execution. They expect bookings/awards to accelerate through year-end into 2023.
“With SHLS posting strong numbers across the board including award and bookings growth of $144M in the quarter, we believe investors will be increasingly confident in SHLS' growth trajectory. We believe the value of shortened construction timelines and skilled labor savings are driving outsized growth, supplementing a strong demand environment of solar where higher electricity prices are outpacing costs from inflation and increased interest rates,” the analysts wrote in a note.