Why UBS Still Sees Long-Term Upside in Shoals (SHLS) Despite Margin Pressure

Shoals Technologies Group, Inc. (NASDAQ:SHLS) is 1 of the 10 Best Renewable Energy Stocks to Buy Now. On February 25, 2026, UBS lowered its terms people connected Shoals Technologies Group to $11 from $12 portion maintaining a Buy rating. According to the firm’s note, fourth-quarter results reflected important headwinds to Shoals’ gross borderline illustration from shifting merchandise mix, rising input costs, and expanding competition. UBS besides said determination is imaginable for important longer-term upside successful the company’s Battery Energy Storage Solutions conception arsenic request from information halfway customers rises.

For context, Shoals reported fourth-quarter 2025 gross of $148.3 million, up 39% twelvemonth implicit year, driven by higher income volumes tied to request for utility-scale star projects. Gross nett roseate to $46.9 cardinal from $40.2 million, but gross borderline fell to 31.6% from 37.6%. The institution said the borderline diminution was caused by higher worldly costs and $3.3 cardinal successful duties and tariffs that were not incurred successful the prior-year quarter. Adjusted EBITDA accrued to $30.3 cardinal from $26.4 million, portion adjusted diluted EPS roseate to $0.10 from $0.08.

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For full-year 2025, gross accrued 19% to $475.3 million, portion backlog and awarded orders reached a grounds $747.6 million. Shoals said the backlog summation reflected continued request for its star products, including maturation successful caller home and planetary markets. For 2026, the institution guided for gross of $560 cardinal to $600 cardinal and adjusted EBITDA of $110 cardinal to $130 million. It besides issued first-quarter guidance, citing headwinds successful the utility-scale star marketplace that changed immoderate lawsuit bid patterns.

Shoals Technologies Group, Inc. (NASDAQ:SHLS) provides electrical balance-of-system solutions for star energy, artillery vigor storage, and related vigor infrastructure applications.

While we admit the imaginable of SHLS arsenic an investment, we judge definite AI stocks connection greater upside imaginable and transportation little downside risk. If you’re looking for an highly undervalued AI banal that besides stands to payment importantly from Trump-era tariffs and the onshoring trend, spot our escaped study connected the best short-term AI stock.

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