Shoals Technologies Group, Inc. (SHLS)
Valuation Overview•Is Shoals Technologies Group, Inc. Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Moderate quality score of 54/100, reflecting stable operating margins and manageable leverage.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is cautious, forecasting potential downside alongside robust expected earnings growth. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
SHLS struggles with subpar profitability and pressured margins. This is supported by a highly conservative balance sheet featuring strong liquidity and pristine Altman Z safety.
The company demonstrates solid revenue growth (13.3% 3Y CAGR) however, earnings have severely contracted over the same period. Operating efficiency remains adequate with margins around 11.2%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $140.6M | +19.1% | +13.3% | +22.0% | — | |
| EBITDA | $11.8M | — | -5.4% | — | — | |
| Net Income | -$297K | +39.2% | -35.9% | — | — | |
| EPS (Diluted) | $-0.00 | +42.9% | -38.3% | -1.0% | — | |
| Free Cash Flow | -$49.1M | -122.2% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 33.5% | 35.0% | 36.8% | 35.0% |
| Operating Margin | 11.2% | 13.6% | 15.6% | 16.1% |
| Net Margin | 6.3% | 7.1% | 12.3% | 13.3% |
| FCF Margin | -14.5% | 10.4% | 7.7% | 11.6% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.06 | $0.07 | +16.7% | ||
| Q1'26 | $0.14 | $0.10 | -28.6% | ||
| Q4'25 | $0.13 | $0.12 | -4.2% | ||
| Q3'25 | $0.08 | $0.10 | +25.0% | ||
| Q2'25 | $0.04 | $0.03 | -25.0% | ||
| Q1'25 | $0.09 | $0.08 | -11.1% | ||
| Q4'24 | $0.10 | $0.08 | -20.0% | ||
| Q3'24 | $0.09 | $0.10 | +11.1% |
Total return is +99.2% (1Y), outperforming the benchmark by +74.2%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +14.6% | +5.3% | — |
| 1Y | +99.2% | +74.2% | — |
| 3YCAGR | -24.7% | -46.7% | — |
| 5YCAGR | -19.5% | -33.5% | — |
| 10YCAGR | -10.3% | -24.8% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Shoals Technologies Group, Inc. (SHLS) valuation, health, and returns.
Shoals Technologies Group, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -55.3% downside from DCF intrinsic value of $4.66)
Shoals Technologies Group, Inc. has multiple valuation anchors: DCF Intrinsic Value: $4.66 | Peer Relative Fair Value: $4.62 | Wall Street Analyst Target: $8.00 (implying -23.2% upside). A convergence of these signals offers higher conviction.
Shoals Technologies Group, Inc. displays fair financial health with a composite quality score of 54/100, supported by a Altman Z-Score of 4.4 (safe zone), Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 5.9%.
Shoals Technologies Group, Inc. does not return material capital to shareholders via dividends or share repurchases, electing to retain earnings to fund internal growth.
Shoals Technologies Group, Inc.'s current growth trajectory is Accelerating. The company achieved +19.1% 1Y revenue growth and +42.9% 1Y EPS growth, compared to its 3Y revenue CAGR of +13.3%.
Wall Street consensus is Buy based on 23 analysts, beating EPS expectations in 50% of recent quarters with a 1-quarter streak. The consensus price target represents a -23.2% change from current levels.
Investment risks for Shoals Technologies Group, Inc. include: -47.4% 1-year max drawdown, high beta (2.59x market volatility). Volatility risk is characterized by a beta of 2.59x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.