Piper Sandler Turns Bullish On Shoals Technologies: Forecasts Less Risk To Industry Growth During 2024

Piper Sandler analyst Kashy Harrison upgraded Shoals Technologies Group Inc SHLS to Overweight from Neutral with a price target of $28. 

The analyst expects SHLS to witness strong demand for their products and services and sees less risk to industry growth during 2024 due to longer project cycle times.

The analyst assumes a revenue CAGR of 9%-13% for SHLS, reflecting a strong core domestic solar wiring solution business.

Assuming the systems revenue mix to be higher in H2 FY23 vs. H1 FY23, Harrison expects the company's gross margin to surpass the consensus of 40%-41% at 42% in H2. This is expected to be led by a higher systems revenue mix and lower warranty charges, partly offset by increased manufacturing startup expenses.

Also, the analyst expects adjusted EBITDA of $47 million (Street: $41 million) and bookings of $385 million for H2 FY23.

Overall, the analyst estimates EPS of $1.02 for FY24 and $1.55 for FY25.

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Price Action: SHLS shares are trading higher by 2.42% at $15.47 on the last check Friday.