Unpacking Q3 Earnings: Shoals (NASDAQ:SHLS) In The Context Of Other Renewable Energy Stocks
The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how renewable energy stocks fared in Q3, starting with Shoals (NASDAQ:SHLS).
Renewable energy companies are buoyed by the secular trend of green energy that is upending traditional power generation. Those who innovate and evolve with this dynamic market can win share while those who continue to rely on legacy technologies can see diminishing demand, which includes headwinds from increasing regulation against “dirty” energy. Additionally, these companies are at the whim of economic cycles, as interest rates can impact the willingness to invest in renewable energy projects.
The 19 renewable energy stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 7% while next quarter’s revenue guidance was 7.2% below.
While some renewable energy stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1% since the latest earnings results.
Shoals (NASDAQ:SHLS)
Started in Huntsville, Alabama, Shoals (NASDAQ:SHLS) designs and manufactures products that make solar energy systems work more efficiently.
Shoals reported revenues of $102.2 million, down 23.9% year on year. This print exceeded analysts’ expectations by 3.4%. Despite the top-line beat, it was still a mixed quarter for the company with revenue guidance for next quarter exceeding analysts’ expectations but a significant miss of analysts’ EBITDA estimates.
“I’m pleased with the robust engagement we experienced in the third quarter. Customers remain cautious yet constructive as we head into the end of 2024 and look into 2025. Quoting volume across our customer base is at record levels, increasing almost 50% from the prior year period, and we are encouraged by strong interest from new customers,” said Brandon Moss, CEO of Shoals.
Shoals Total Revenue
Unsurprisingly, the stock is down 22.7% since reporting and currently trades at $4.46.
Founded in 1987, American Superconductor (NASDAQ:AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.
American Superconductor reported revenues of $54.47 million, up 60.2% year on year, outperforming analysts’ expectations by 6.1%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
American Superconductor Total Revenue
The market seems happy with the results as the stock is up 23.1% since reporting. It currently trades at $28.94.
One of the first EV charging companies to go public, Blink Charging (NASDAQ:BLNK) is a manufacturer, owner, operator, and provider of electric vehicle charging equipment and networked EV charging services.
Blink Charging reported revenues of $25.19 million, down 41.9% year on year, falling short of analysts’ expectations by 28.1%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Blink Charging delivered the weakest full-year guidance update in the group. As expected, the stock is down 30.8% since the results and currently trades at $1.39.
With its name deriving from a combination of “generating” and “AC”, Generac (NYSE:GNRC) offers generators and other power products for residential, industrial, and commercial use.
Generac reported revenues of $1.17 billion, up 9.6% year on year. This number topped analysts’ expectations by 1%. Overall, it was an exceptional quarter as it also produced a solid beat of analysts’ EBITDA estimates.
The stock is flat since reporting and currently trades at $165.40.
Headquartered in Arizona, First Solar (NASDAQ:FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.
First Solar reported revenues of $887.7 million, up 10.8% year on year. This print came in 17.6% below analysts' expectations. Overall, it was a disappointing quarter as it also recorded full-year revenue guidance missing analysts’ expectations.
The stock is down 7.9% since reporting and currently trades at $184.
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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