SHOALS TECHNOLOGIES GROUP -A (SHLS) Stock Fundamental Analysis
NASDAQ:SHLS - Nasdaq - US82489W1071 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to SHLS. SHLS was compared to 97 industry peers in the Electrical Equipment industry. SHLS has an excellent financial health rating, but there are some minor concerns on its profitability. SHLS may be a bit undervalued, certainly considering the very reasonable score on growth With these ratings, SHLS could be worth investigating further for value investing!.
1. Profitability
1.1 Basic Checks
In the past year SHLS was profitable.
In the past year SHLS had a positive cash flow from operations.
SHLS had positive earnings in each of the past 5 years.
Of the past 5 years SHLS 4 years had a positive operating cash flow.
1.2 Ratios
The Return On Assets of SHLS (3.04%) is better than 80.41% of its industry peers.
SHLS has a better Return On Equity (4.33%) than 76.29% of its industry peers.
SHLS has a better Return On Invested Capital (5.08%) than 75.26% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SHLS is below the industry average of 9.56%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.04% | ||
| ROE | 4.33% | ||
| ROIC | 5.08% |
ROA(3y)9.74%
ROA(5y)9.41%
ROE(3y)18.49%
ROE(5y)N/A
ROIC(3y)7.05%
ROIC(5y)8.61%
1.3 Margins
With an excellent Profit Margin value of 6.04%, SHLS belongs to the best of the industry, outperforming 81.44% of the companies in the same industry.
In the last couple of years the Profit Margin of SHLS has declined.
SHLS's Operating Margin of 12.82% is amongst the best of the industry. SHLS outperforms 85.57% of its industry peers.
SHLS's Operating Margin has declined in the last couple of years.
SHLS's Gross Margin of 35.57% is fine compared to the rest of the industry. SHLS outperforms 79.38% of its industry peers.
In the last couple of years the Gross Margin of SHLS has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.82% | ||
| PM (TTM) | 6.04% | ||
| GM | 35.57% |
OM growth 3Y-8.94%
OM growth 5Y-7.19%
PM growth 3Y77.6%
PM growth 5Y-19.03%
GM growth 3Y-2.8%
GM growth 5Y3.07%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SHLS is destroying value.
Compared to 1 year ago, SHLS has less shares outstanding
Compared to 5 years ago, SHLS has about the same amount of shares outstanding.
Compared to 1 year ago, SHLS has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.49 indicates that SHLS is not a great score, but indicates only limited risk for bankruptcy at the moment.
SHLS has a better Altman-Z score (2.49) than 68.04% of its industry peers.
SHLS has a debt to FCF ratio of 1.97. This is a very positive value and a sign of high solvency as it would only need 1.97 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 1.97, SHLS belongs to the top of the industry, outperforming 87.63% of the companies in the same industry.
A Debt/Equity ratio of 0.25 indicates that SHLS is not too dependend on debt financing.
SHLS has a Debt to Equity ratio of 0.25. This is comparable to the rest of the industry: SHLS outperforms 57.73% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 1.97 | ||
| Altman-Z | 2.49 |
ROIC/WACC0.59
WACC8.57%
2.3 Liquidity
SHLS has a Current Ratio of 2.33. This indicates that SHLS is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 2.33, SHLS is in the better half of the industry, outperforming 69.07% of the companies in the same industry.
SHLS has a Quick Ratio of 1.64. This is a normal value and indicates that SHLS is financially healthy and should not expect problems in meeting its short term obligations.
SHLS has a better Quick ratio (1.64) than 65.98% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.33 | ||
| Quick Ratio | 1.64 |
3. Growth
3.1 Past
SHLS shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -45.00%.
Measured over the past years, SHLS shows a decrease in Earnings Per Share. The EPS has been decreasing by -0.95% on average per year.
The Revenue for SHLS has decreased by -18.35% in the past year. This is quite bad
Measured over the past years, SHLS shows a very strong growth in Revenue. The Revenue has been growing by 22.54% on average per year.
EPS 1Y (TTM)-45%
EPS 3Y14.47%
EPS 5Y-0.95%
EPS Q2Q%-33.33%
Revenue 1Y (TTM)-18.35%
Revenue growth 3Y23.25%
Revenue growth 5Y22.54%
Sales Q2Q%-17.98%
3.2 Future
The Earnings Per Share is expected to grow by 11.47% on average over the next years. This is quite good.
The Revenue is expected to grow by 8.35% on average over the next years. This is quite good.
EPS Next Y16.59%
EPS Next 2Y19.4%
EPS Next 3Y17.53%
EPS Next 5Y11.47%
Revenue Next Year8.44%
Revenue Next 2Y10.15%
Revenue Next 3Y10.36%
Revenue Next 5Y8.35%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 10.24, the valuation of SHLS can be described as reasonable.
89.69% of the companies in the same industry are more expensive than SHLS, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.29. SHLS is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 8.79, the valuation of SHLS can be described as reasonable.
Based on the Price/Forward Earnings ratio, SHLS is valued cheaper than 92.78% of the companies in the same industry.
SHLS is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.24 | ||
| Fwd PE | 8.79 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, SHLS is valued cheaply inside the industry as 83.51% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, SHLS is valued cheaper than 93.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.85 | ||
| EV/EBITDA | 10.71 |
4.3 Compensation for Growth
SHLS's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of SHLS may justify a higher PE ratio.
SHLS's earnings are expected to grow with 17.53% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.62
PEG (5Y)N/A
EPS Next 2Y19.4%
EPS Next 3Y17.53%
5. Dividend
5.1 Amount
SHLS does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
3.38
+0.05 (+1.5%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryElectrical Equipment
Earnings (Last)
Earnings (Next)
Inst Owners110.54%
Inst Owner Change-0.55%
Ins Owners0.79%
Ins Owner Change9.79%
Market Cap565.00M
Analysts78.57
Price Target6.55 (93.79%)
Short Float %10.01%
Short Ratio2.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-19.43%
Min EPS beat(2)-20.51%
Max EPS beat(2)-18.35%
EPS beat(4)2
Avg EPS beat(4)-1.54%
Min EPS beat(4)-20.51%
Max EPS beat(4)25.69%
EPS beat(8)5
Avg EPS beat(8)4.1%
EPS beat(12)9
Avg EPS beat(12)12.34%
EPS beat(16)12
Avg EPS beat(16)7.37%
Revenue beat(2)2
Avg Revenue beat(2)2.05%
Min Revenue beat(2)1.47%
Max Revenue beat(2)2.62%
Revenue beat(4)3
Avg Revenue beat(4)1.47%
Min Revenue beat(4)-5.77%
Max Revenue beat(4)7.56%
Revenue beat(8)5
Avg Revenue beat(8)0.93%
Revenue beat(12)7
Avg Revenue beat(12)1.38%
Revenue beat(16)9
Avg Revenue beat(16)0.88%
PT rev (1m)-1.38%
PT rev (3m)-16.26%
EPS NQ rev (1m)2.39%
EPS NQ rev (3m)-59.15%
EPS NY rev (1m)-10.33%
EPS NY rev (3m)-10.34%
Revenue NQ rev (1m)-0.28%
Revenue NQ rev (3m)-26.63%
Revenue NY rev (1m)-1.16%
Revenue NY rev (3m)-2.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.24 | ||
| Fwd PE | 8.79 | ||
| P/S | 1.42 | ||
| P/FCF | 7.85 | ||
| P/OCF | 7.03 | ||
| P/B | 1.01 | ||
| P/tB | 1.27 | ||
| EV/EBITDA | 10.71 |
EPS(TTM)0.33
EY9.76%
EPS(NY)0.38
Fwd EY11.38%
FCF(TTM)0.43
FCFY12.74%
OCF(TTM)0.48
OCFY14.23%
SpS2.39
BVpS3.33
TBVpS2.67
PEG (NY)0.62
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.04% | ||
| ROE | 4.33% | ||
| ROCE | 7.19% | ||
| ROIC | 5.08% | ||
| ROICexc | 5.25% | ||
| ROICexgc | 6.26% | ||
| OM | 12.82% | ||
| PM (TTM) | 6.04% | ||
| GM | 35.57% | ||
| FCFM | 18.03% |
ROA(3y)9.74%
ROA(5y)9.41%
ROE(3y)18.49%
ROE(5y)N/A
ROIC(3y)7.05%
ROIC(5y)8.61%
ROICexc(3y)7.24%
ROICexc(5y)8.93%
ROICexgc(3y)8.98%
ROICexgc(5y)20.95%
ROCE(3y)9.98%
ROCE(5y)12.18%
ROICexcg growth 3Y-14.52%
ROICexcg growth 5Y-38.93%
ROICexc growth 3Y-7.16%
ROICexc growth 5Y-15.5%
OM growth 3Y-8.94%
OM growth 5Y-7.19%
PM growth 3Y77.6%
PM growth 5Y-19.03%
GM growth 3Y-2.8%
GM growth 5Y3.07%
F-Score6
Asset Turnover0.5
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.25 | ||
| Debt/FCF | 1.97 | ||
| Debt/EBITDA | 2.22 | ||
| Cap/Depr | 66.47% | ||
| Cap/Sales | 2.1% | ||
| Interest Coverage | 3.14 | ||
| Cash Conversion | 126% | ||
| Profit Quality | 298.4% | ||
| Current Ratio | 2.33 | ||
| Quick Ratio | 1.64 | ||
| Altman-Z | 2.49 |
F-Score6
WACC8.57%
ROIC/WACC0.59
Cap/Depr(3y)65.64%
Cap/Depr(5y)54.49%
Cap/Sales(3y)1.74%
Cap/Sales(5y)1.8%
Profit Quality(3y)176.81%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-45%
EPS 3Y14.47%
EPS 5Y-0.95%
EPS Q2Q%-33.33%
EPS Next Y16.59%
EPS Next 2Y19.4%
EPS Next 3Y17.53%
EPS Next 5Y11.47%
Revenue 1Y (TTM)-18.35%
Revenue growth 3Y23.25%
Revenue growth 5Y22.54%
Sales Q2Q%-17.98%
Revenue Next Year8.44%
Revenue Next 2Y10.15%
Revenue Next 3Y10.36%
Revenue Next 5Y8.35%
EBIT growth 1Y-35.2%
EBIT growth 3Y12.23%
EBIT growth 5Y13.73%
EBIT Next Year75.33%
EBIT Next 3Y33.16%
EBIT Next 5Y21.27%
FCF growth 1Y-11.53%
FCF growth 3YN/A
FCF growth 5Y15.88%
OCF growth 1Y-12.58%
OCF growth 3YN/A
OCF growth 5Y17.31%