Shoals Lowers Gross Margin to 30–35% as Q1 Sales Guided to $125–135M
Shoals reported Q4 adjusted EPS of $0.10 missing estimates by $0.04 while revenue of $148.3 M topped consensus by $2.9 M, backed by a $747.6 M backlog. Management guided Q1 sales to $125–135 M and FY26 to $560–600 M but reset gross margin to 30–35%, sparking analysts’ price cuts.
1. Q4 Earnings Performance
Shoals reported adjusted EPS of $0.10 for Q4 2025, missing the consensus by $0.04. Revenue reached $148.3 million, beating estimates by $2.9 million, while backlog and awarded orders stood at $747.6 million as of December 31, 2025.
2. Guidance and Margin Framework
Management forecasted first-quarter sales of $125–135 million against street estimates of $119.3 million and full-year 2026 sales of $560–600 million. The company also reset its gross margin range to 30–35%, marking a strategic shift in cost structure expectations.
3. Analyst Reactions and Price Targets
Several firms lowered price targets after the margin reset overshadowed the revenue outlook, with Needham cutting from $14 to $12, Roth trimming from $15 to $10 and Morgan Stanley reducing from $9.50 to $8.50. Analysts also slashed 2026 EPS estimates from $0.47 to $0.36.