Shoals Technologies Group, Inc.SHLS22,35 $
What he earns
The company has three main areas of activity:
- Solutions for solar energy, which include cables, trackers and junction boxes to ensure balanced and optimal operation of power systems.
- Products and complete solutions for energy storage and storage systems, which ensure the "balance of the system" - the smooth and most efficient functioning of all elements, converting the output power of the solar panel into usable electrical energy.
- Charging stations for electric vehicles, That, at the request of the company, cost more profitably than competitive products, installed from scratch in 1-3 days and reduce key material costs, service and personnel by tens of percent.
What's wrong
Liabilities without capital. So far, all assets of the company consist mainly of the amount of short-term and long-term liabilities., and equity, which represents the claims of the owners in relation to the company, although it has increased markedly compared to the failure 2020, still negative.
Bulky debt. The company's net debt is almost $ 280 million, and the financial dependence ratio of the debt ratio is one – shoals Technologies' liabilities are 100% of its assets. Increased debt burden will create additional pressure on the business and slow down the pace of its development, especially in light of the increasingly bold increase in the key rate in the US.
Cash flow is getting worse. Since 2020, the free cash flow indicator has collapsed to negative values, which continue to increase. It turns out, that the company spends more money, what does he make, and while this gap is growing stronger.
What good
Stable revenue growth. The company's revenue is growing steadily and for less than 5 years increased more than in 2 Times, which indicates the progressive development of the business. Shoals Technologies products are relevant, and there is a demand for them.
Profits rose in 4 Times. After failing in 2021 for 1 quarter 2022 net profit of the organization grew more than in 4 times - from 4 up to $17 million. The lifting of pandemic restrictions and the recovery of all sectors of the economy contribute to growth, including alternative energy. Maybe, by the end of 2022, the company will be able to update the record of 2020 and show a net profit of more than 34 million.
The portfolio of orders is actively growing. The driver of future growth is also the growing portfolio of orders. According to management, since the beginning of 2021, it has grown by 67% and continues to increase steadily even in the face of inflation and chaos in the international economy and politics.
What's the bottom line?
Shoals Technologies competently integrates into the industry of alternative energy and renewable energy sources, where the company seeks to enter not as another seller of solar panels, and as the next step in the development of target technologies, which will allow you to use them most effectively, with lower losses and resource costs.
Business revenue is growing, profit is restored and new orders appear steadily, but the threat to the issuer is created by a significant debt burden, the burden of which is becoming heavier in the current economic situation.
