SHLS · Technology(semiconductors & related devices) · 8 years of annual accounts filed with the SEC · latest fiscal year ended 2025-12-31
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Shoals Technologies Group, Inc. reported revenue of $475.3 million in fiscal 2025. Of the $315.0 million its operations generated over 8 years, 20.4% went back into the business and 8.0% to buybacks. On the accounting screens, it passes 5 of 8 Piotroski tests, its Altman Z'' of 3.91 is in the safe zone and its Beneish M-score is above the -1.78 line; 3 of the six cross-checks between its statements fire.
Revenue, fiscal 2025475.3M
Operating margin11.9%gross margin 35.0%
Return on invested capital—9.8% on average over 4 years
Free cash flow after stock pay-25.9M-5.4% of revenue
Net debt ÷ EBITDA—net debt —
Piotroski F-score5/8tests of improvement passed
Is it growing?
Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.
RevenueOperating income
0200.0M400.0M600.0M
2018
2019Revenue 144.5MOperating income 26.9M
2020Revenue 175.5MOperating income 37.3M
2021Revenue 213.2MOperating income 36.2M
2022Revenue 326.9MOperating income 66.3M
2023Revenue 488.9MOperating income 79.0M
2024Revenue 399.2MOperating income 51.2M
2025Revenue 475.3MOperating income 56.4M
20182019202020212022202320242025
Compound growth a year
3 yrs
5 yrs
7 yrs
Revenue
+13.3%
+22.0%
—
Operating income
-5.3%
+8.6%
—
Net income
-35.9%
-0.1%
—
Earnings per share
-36.0%
—
—
Shares
+0.1%
—
—
Falling shares are buybacks: each remaining share owns more of the company.
Does it earn more than its capital costs?
Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.
Return on invested capitalCost of capital today · 10.2%
0.0%5.0%10.0%15.0%
2018
2019
2020
2021Return on invested capital 14.2%
2022Return on invested capital 11.8%
2023Return on invested capital 8.4%
2024Return on invested capital 4.7%
2025
20182019202020212022202320242025
Economic profit
Economic profit
-40.0M-20.0M020.0M
2018
2019
2020
2021Economic profit 10.1M
2022Economic profit 8.5M
2023Economic profit -12.5M
2024Economic profit -38.4M
2025
20182019202020212022202320242025
(return on capital − cost of capital) × capital invested: the profit left after paying for the money used. Today's cost of capital is applied to every year, since a past one cannot be rebuilt honestly.
Return on equity
5.6%
Return on assets
3.7%
Asset turnover
0.53×
Overheads (SG&A)
21.4% of revenue
Is the profit cash, and where does the cash go?
Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.
Net incomeFree cash flowAfter stock-based pay
-50.0M050.0M100.0M150.0M
2018
2019Net income 25.1MFree cash flow 34.5MAfter stock-based pay 34.5M
2020Net income 33.8MFree cash flow 50.8MAfter stock-based pay 42.6M
2021Net income 2.3MFree cash flow -8.2MAfter stock-based pay -19.5M
2022Net income 127.6MFree cash flow 36.3MAfter stock-based pay 20.2M
2023Net income 40.0MFree cash flow 81.4MAfter stock-based pay 60.5M
2024Net income 24.1MFree cash flow 72.0MAfter stock-based pay 57.8M
2025Net income 33.6MFree cash flow -16.0MAfter stock-based pay -25.9M
20182019202020212022202320242025
Where 8 years of operating cash went, 2018–2025
315.0M generated by the business. Each band is its share of that total.
Reinvested in the business 20%64.2M
Acquisitions 4%12.9M
Dividends 0%0
Share buybacks 8%25.3M
Kept, or used to pay down debt 67%212.6M
Over the same years it paid 80.6M in stock. The buybacks did not even cover what was handed out in stock.
Per share
Earnings per shareFree cash flow per shareDividend per share
$-0.25$0.00$0.25$0.50$0.75$1.00
2018
2019
2020
2021
2022Earnings per share $0.76Free cash flow per share $0.22
2023Earnings per share $0.24Free cash flow per share $0.49
2024Earnings per share $0.14Free cash flow per share $0.43
2025Earnings per share $0.20Free cash flow per share $-0.09
20182019202020212022202320242025
Shares outstanding
Diluted shares
164.0M166.0M168.0M170.0M
2018
2019
2020
2021
2022Diluted shares 167.6M
2023Diluted shares 164.5M
2024Diluted shares 168.7M
2025Diluted shares 168.4M
20182019202020212022202320242025
How strong is the balance sheet?
Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.
Net debt
0100.0M200.0M300.0M400.0M
2018
2019
2020Net debt 348.8M
2021Net debt 242.0M
2022Net debt 230.3M
2023Net debt 158.7M
2024Net debt 118.2M
2025
20182019202020212022202320242025
Net debt ÷ EBITDA
—
Interest coverage
6× operating income ÷ interest
Current ratio
2.03 current assets ÷ current liabilities
Cash conversion cycle
128 days collects in 99d, stock 106d, pays in 77d
Three classic screens of the accounts
Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.
Piotroski F-score
Is the business improving? Nine yes-or-no tests, this year against last.
5of 8 tests passed
✓ProfitableReturn on assets above zeropassed
✓Cash from operationsOperating cash flow above zeropassed
✓Profitability improvedReturn on assets higher than a year beforepassed
✕Profit backed by cashOperating cash flow above net income (low accruals)failed
–Less long-term debtLong-term debt as a share of assets fell — not reportedno data
✕More liquidCurrent ratio higher than a year beforefailed
✓No new sharesShare count did not growpassed
✕Better gross marginGross margin higher than a year beforefailed
✓Sells more per assetAsset turnover higher than a year beforepassed
Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.
Altman Z''-score
Does the balance sheet look like those of companies that went bankrupt?
3.91safe zone
1.12.6
Working capital ÷ assets 0.14 × 6.56+0.95
Retained earnings ÷ assets 0.15 × 3.26+0.48
Operating income ÷ assets 0.06 × 6.72+0.42
Equity ÷ liabilities 1.97 × 1.05+2.07
Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.
Beneish M-score
Do the accounts resemble those of companies that manipulated their earnings?
-1.69above the -1.78 line
-1.78
Receivables vs sales 1.38+1.27
Gross margin slipping 1.02+0.54
Soft assets 0.90+0.36
Sales growth 1.19+1.06
Slower depreciation 1.50+0.17
Overheads vs sales 1.04-0.18
Profit not in cash 0.02+0.09
Leverage rising 0.50-0.16
Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.
Where the statements disagree
Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.
Receivables are growing 65% against revenue growing 19%.
Benign
A shift towards larger customers on longer terms, or sales concentrated at the end of the period.
Worrying
Sales are being made on looser credit, or revenue has been booked that may never be collected.
Inventory is growing 61% against revenue growing 19%.
Benign
Stocking up for a launch, or securing supply.
Worrying
Demand is softening; discounts or write-downs tend to follow.
Reported profit comfortably exceeds the cash generated (34M against 17M).
Benign
Growth consuming working capital, or the seasonality of the year-end.
Worrying
Profit held up by accounting entries that do not turn into money.
What is it worth, under which assumptions?
A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.
Value per share, with these assumptions$1.97discounted at 10.2% a year · 55% of it from after year 10
Type a share price on the left to ask the reverse questions: what growth, what margin or what discount rate that price implies.
What the value implies, in the usual multiples
At this model's value
Price ÷ earnings
9.9×
Enterprise value ÷ EBITDA
4.7×
Enterprise value ÷ revenue
0.7×
Free cash flow yield
-7.8%
From cash flows to a value per share
10 years of cash flow, today149.2M
Everything after, today183.2M
The whole business332.4M
Minus net debt-0
What belongs to shareholders332.4M
Divided among 168.4M shares: <strong>$1.97</strong> each.
The projection next to its history
Reported free cash flow after stock pay, then the model's. A projection that looks nothing like the past needs a reason.
ReportedProjected
-50.0M-25.0M025.0M50.0M75.0M
2018
2019Reported 34.5M
2020Reported 42.6M
2021Reported -19.5M
2022Reported 20.2M
2023Reported 60.5M
2024Reported 57.8M
2025Reported -25.9M
2026Projected 14.1M
2027Projected 16.9M
2028Projected 19.9M
2029Projected 22.9M
2030Projected 26.0M
2031Projected 28.9M
2032Projected 31.5M
2033Projected 33.7M
2034Projected 35.2M
2035Projected 36.1M
201820202022202420262028203020322034
Year by year
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
Revenue
579.9M
694.9M
817.7M
944.4M
1.1B
1.2B
1.3B
1.4B
1.5B
1.5B
Growth
22.0%
19.8%
17.7%
15.5%
13.3%
11.2%
9.0%
6.8%
4.7%
2.5%
Cash margin
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
2.4%
Free cash flow
14.1M
16.9M
19.9M
22.9M
26.0M
28.9M
31.5M
33.7M
35.2M
36.1M
Worth today
12.8M
13.9M
14.9M
15.6M
16.0M
16.2M
16.0M
15.5M
14.7M
13.7M
If the least-known inputs move
Value per share as two inputs change at a time. Neighbouring cells that differ a lot are the conclusion: the value depends on numbers nobody knows to a point.
The discount rate and growth forever
discount ↓ · forever →
1.5%
2.0%
2.5%
3.0%
3.5%
9.2%
2
2
2
2
3
9.7%
2
2
2
2
2
10.2%
2
2
2
2
2
10.7%
2
2
2
2
2
11.2%
2
2
2
2
2
Year-one growth and the final margin
margin ↓ · growth →
18.0%
20.0%
22.0%
24.0%
26.0%
1.9%
1
2
2
2
2
2.2%
2
2
2
2
2
2.4%
2
2
2
2
2
2.7%
2
2
2
2
2
2.9%
2
2
2
2
3
All the inputs moving at once
5,000 valuations, each with growth, final margin, discount rate and growth forever drawn at random around the values on the left (spreads of 3.0%, 2.0%, 1.0% and 0.5%). Not a probability — the spreads are assumptions too — but an honest picture of how wide the answer is.
10th percentile$0.34
Median$1.97
90th percentile$3.89
$0.00$2.00$4.00
Half of the simulations land between <b>$1.11</b> and <b>$2.92</b>; one in ten below $0.34, one in ten above $3.89.
Does the long run make sense?
2.2×The terminal value prices the business in year 10 at 2.2 times that year's EBITDA.
4%To grow 2.5% forever while reinvesting 70% of its after-tax operating profit, the business must earn 4% on the new capital — it has earned 10% on average over the last five years.
55%of the value comes from after year 10. The more of it, the more the answer depends on the part nobody can see.
What lenders charge, after the tax saving on interest: 6.67% × (1 − 30.8%) = <strong>4.62%</strong>.
Weighted by how much of each the company uses (book value (no price given)): <strong>10.17%</strong>, the rate every future cash flow is discounted at.
What it has filed lately
The last twelve months at the SEC, most important first: annual and quarterly reports, events, large holders and insiders.
Every Form 4 filed in the last twelve months, read line by line: 6 filings by 5 people. Open-market purchases and sales are counted apart from awards, option exercises and shares withheld for taxes.
Bought on the open market—none in the period
Sold on the open market$104,1001 sale(s) by 1 insider(s)
Under pre-arranged plans0%of the sales followed a 10b5-1 plan set months earlier
A Form 4 says what happened, when, how many shares and at what price. It does not say why: a sale can be diversification, a tax bill or a plan fixed months earlier, and an award is pay, not a purchase. Nothing here is a reason to buy or sell anything.
Which large funds report holding it
From the Form 13F of the 28 institutions followed on this site, as of the end of their last reported quarter. A 13F is filed up to 45 days later and shows only long positions in US-listed shares.
Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.
