Shoals Technologies Q1 results beat estimates despite higher costs

Overview

• US electrical infrastructure firm's Q1 revenue rose 75% yr/yr, beating analyst expectations

• Adjusted EPS for Q1 beat analyst expectations

• Company raised full-year revenue and adjusted EBITDA outlooks on record backlog and strong demand

Outlook

• Shoals sees Q2 revenue between $150 mln and $170 mln

• Company expects Q2 adjusted EBITDA of $28 mln to $33 mln

• Shoals raises full-year 2026 revenue guidance to $600 mln-$640 mln

Result Drivers

• STRONG DEMAND AND MARKET SHARE GAINS - Co said Q1 revenue growth was driven by robust demand for its products, market share capture initiatives, and higher project volumes

• HIGHER COSTS PRESSURE MARGINS - Gross margin declined due to increased tariffs, higher material costs, and additional right-of-use asset amortization from the new facility

• LITIGATION AND COMPENSATION EXPENSES - General and administrative expenses rose mainly due to increased legal costs for ongoing litigation and higher incentive compensation from increased headcount

Company press release: ID:nGNXccCfW3

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the electrical components & equipment peer group is "buy"

• Wall Street's median 12-month price target for Shoals Technologies Group Inc is $9.00, about 8.8% above its May 4 closing price of $8.27

• The stock recently traded at 19 times the next 12-month earnings vs. a P/E of 19 three months ago

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