Shoals Sees 39% Q4 Sales Growth as UBS Cuts Target to $11
UBS lowered Shoals’ price target to $11 from $12 while keeping a Buy rating as Q4 revenue rose 39% to $148.3M and gross margin fell to 31.6%. Full-year revenue climbed 19% to $475.3M and 2026 guidance targets $560M–$600M, underscoring long-term battery storage upside.
1. UBS Lowers Price Target and Maintains Buy
UBS reduced its price target on Shoals Technologies Group to $11 from $12 while maintaining a Buy rating, highlighting gross margin pressure from shifting product mix, rising input costs and increased competition.
2. Fourth-Quarter Financial Results
In Q4 2025, revenue climbed 39% year over year to $148.3 million and gross profit rose to $46.9 million, but gross margin slid to 31.6% from 37.6% due to higher material costs and $3.3 million in tariffs; adjusted EBITDA reached $30.3 million and EPS was $0.10.
3. Full-Year 2025 Performance
Shoals reported full-year 2025 revenue of $475.3 million, a 19% increase, and ended the period with a record backlog and awarded orders of $747.6 million, driven by strong demand for solar balance-of-system products in domestic and international markets.
4. 2026 Guidance and Battery Segment Outlook
The company projects 2026 revenue of $560 million to $600 million and adjusted EBITDA of $110 million to $130 million, while highlighting significant long-term upside in its Battery Energy Storage Solutions segment as data center demand grows despite initial Q1 headwinds.