Shoals Technologies stock price drops 11% due to earnings missing expectations, despite revenue surpassing forecasts

2026-02-24 18:48:20

Portland, Tennessee - Tuesday, Shoals Technologies Group, Inc. (NASDAQ: SHLS) announced mixed fourth-quarter results.

Despite revenue exceeding expectations and guidance being stronger than anticipated, lower-than-expected profits caused the company’s stock to fall 11.21% in pre-market trading.

The electrical balance system solutions provider reported an adjusted fourth-quarter earnings of $0.10 per share, below analysts’ forecast of $0.13.

However, revenue grew 39% year-over-year to $148.3 million, surpassing the market consensus of $145.5 million and up from $107 million in the same period last year. The revenue growth was mainly driven by increased sales volume due to rising demand for utility-scale solar projects.

Gross profit increased from $40.2 million in the same period last year to $46.9 million, but gross margin declined from 37.6% to 31.6%.

The narrowing gross margin was primarily due to higher material costs, $3.3 million in tariffs and taxes, and amortization of $1.5 million related to new operational facilities in Portland, Tennessee.

CEO Brandon Moss stated, “I am pleased with our fourth-quarter performance, with revenue exceeding $148 million, a 39% year-over-year increase. Our business team drove sustained strong order growth, resulting in record backlog and awarded orders (BLAO) reaching $747.6 million, up 18% from the end of 2024.”

For the first quarter of 2026, Shoals expects revenue between $125 million and $135 million, with a midpoint of $130 million, exceeding analysts’ consensus estimate of $118.8 million. The company also provided full-year 2026 revenue guidance in the range of $560 million to $600 million.

General and administrative expenses increased from $21.5 million to $27.3 million, mainly due to an additional $7.9 million in professional services related to wire insulation shrinkage, intellectual property, and securities litigation.

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