Shoals Technologies Group, Inc. (SHLS): A Bull Case Theory

We came across a bullish thesis on Shoals Technologies Group, Inc. (SHLS) on Value Investing Subreddit Page by chird_. In this article, we will summarize the bulls’ thesis on SHLS. Shoals Technologies Group, Inc. (SHLS)’s share was trading at $4.41 as of May 6^th. SHLS’s trailing and forward P/E were 40.09 and 11.03 respectively according to Yahoo Finance.

A photovoltaic field at dawn, its solar panels shimmering in the light of a new day.

Shoals Technologies (SHLS) stands out as a deeply undervalued opportunity in the renewable energy sector, especially as global demand for clean energy and AI-driven power infrastructure accelerates. Specializing in electrical balance of system solutions, Shoals is strategically expanding into supporting large-scale data centers, positioning itself at the heart of the AI energy boom. Trading around $4.40, with a fair value estimate of $12.95, the stock offers over 65% upside. Financials are compelling: a PEG ratio of 0.37, forward PE of 8.45, and a free cash flow yield above 8% reflect a growth story trading at value levels. The company maintains a strong balance sheet, with low debt (0.25 debt/equity) and high liquidity (current ratio over 2), while generating consistent cash flow. Although ROIC remains modest at 4.42%, the stock’s risk/reward profile is highly attractive. With overlooked fundamentals and long-term tailwinds, SHLS presents a compelling entry point before broader market recognition.

Shoals Technologies Group, Inc. (SHLS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held SHLS at the end of the fourth quarter which was 27 in the previous quarter. While we acknowledge the risk and potential of SHLS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SHLS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.