What Is Driving Shoals Technologies Group Inc (NASDAQ: SHLS) Stock?

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Shoals Technologies Group Inc (NASDAQ: SHLS) stock rose over 2.4% in the pre-market session of 16th March, 2021 (Source: Google finance) after the company for fiscal 2020 grew revenues 21%, expanded adjusted EBITDA margins more than 900 basis points, increased the percentage of the revenues from system solutions to 66%.

For 2021, the company is executing on the growth strategies that includes converting more customers to the BLA solution, broadening the product offering into complementary categories of EBOS, expanding internationally and introducing new products for EV charging infrastructure.  BLA is continuing to take share from conventional homerun solutions and is on track to convert several new EPCs and developers to the system in 2021.

The company is on schedule to launch wire management and IV curve benchmarking products in Q2 to complement the BLA and the company anticipates that both products to begin generating revenues in Q4.  The company has recently hired the head of EMEA sales to continue building the international sales pipeline.  The company is taking steps to accelerate the development of the EV infrastructure business because the company sees an opportunity to bring game changing innovation to that market. The company’s adjusted net income increased 10.6% to $11.1 million, compared to $10.1 million during the same period in the prior year. Adjusted EBITDA grew 32.0% to $14.1 million, compared to $10.7 million for the prior-year period.

SHLS in the fourth quarter of FY 20 has reported the adjusted earnings per share of 3 cents, beating the analysts’ estimates for the adjusted earnings per share of 2 cents, according to analysts polled by Capital IQ. The company had reported the adjusted revenue growth of 2.4 percent to $38.8 million in the fourth quarter of FY 20, beating the analysts’ estimates for revenue of $38.3 billion. The Company’s backlog and awarded orders at December 31, 2020 were $157 million, which represents an increase of 46% year-over-year.  The increase in backlog and awarded orders reflects continued robust demand for the company’s products from customers in the U.S.

The company is projecting adjusted FY21 net income to be in a range of $47 million to $51 million on between $230 million to $240 million in revenue. The analysts, on average, are looking for Shoals to earn $48.7 million this year, excluding one-time items, on $232.7 million in revenue.

For fiscal 2021, the company expects, revenues to be in the range of $230 million to $240 million, up 31.0% to 36.7% year-over-year and adjusted net income to be in the range of $47 to $51 million.

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