Shoals Technologies Group: Improving Setup in 2H and 2027

Research evidence excerpt

M

Idea

August 5, 2026 04:01 AM GMT

Shoals Technologies Group | North America

Morgan Stanley & Co. LLC

David Arcaro, CFA

Equity Analyst

Improving Setup in 2H and 2027

Jeremy Herring

Research Associate

What’s Changed

Shoals Technologies Group (SHLS.O)

From

To

Price Target

$9.00

$10.00

Alexandre Zimmermann

Research Associate

Zhizhong Dong

Research Associate

AlphaSignals Earnings Reaction

Unchanged

Modest upside

Largely unchanged

Impact to our thesis

Financial results versus consensus

Direction of next 12-month

consensus EPS

Source: Company data, Morgan Stanley Research

SHLS 2Q26 results broadly met expectations and looking ahead

we've become more constructive on the growth outlook as total

backlog continues to increase and SHLS announced a second

strategic BESS partner, though lower GM will likely still weigh

on shares. We've raised our PT to $10 and remain EW.

Key Takeaways

2Q revenue met expectations but gross margin came in ~110 bps below

Amanda Huang

Research Associate

Shoals Technologies Group (SHLS.O, SHLS US)

Clean Tech | United States of America

Stock Rating

Industry View

Price target

Shr price, close (Aug 4, 2026)

Mkt cap, curr (mm)

52-Week Range

Fiscal Year Ending

Equal-weight

In-Line

$10.00

$9.22

$1,606

$13.18-4.43

12/25 12/26e 12/27e 12/28e

EPS ($)**

Revenue, net ($mm)

P/E

Div yld (%)

0.36

475

20.5

0.39

622

19.1

0.0

0.51

757

15.0

0.0

0.65

864

12.2

0.0

SHLS achieved a 1.3 book-to-bill and now has $801m of BLAO, ~$700m is

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

e = Morgan Stanley Research estimates

expected to ship over the NTM, while quarterly quote activity remained above

Quarterly EPS ($)

$1b.

Quarter

2025

Q1

Q2

Q3

Q4

0.03

0.10

0.12

0.10

consensus; offsetting this, net income was notably higher than consensus.

Gross margin is expected to improve in 2H (vs 1H) and sequentially (3Q to 4Q) on

favorable product mix and productivity gains from SHLS's new facility.

SHLS recognized $20m of BESS rev and booked $10m of orders in 2Q (and a

2026e 2026e

Prior Current

0.10

0.12

0.07a

0.12a

0.10

0.11

2027e 2027e

Prior Current

0.11

0.12

0.13

0.11

0.13

0.14

…