Should I Buy SHLS? SHLS 2026 Analysis

Should You Buy Shoals Technologies Group Inc (SHLS) Today? Analysis, Price Targets, and 2026 Outlook.

Conclusion

Hold

Latest Price

10.020

1 Day change

-1.28%

52 Week Range

11.360

Analysis Updated At

2026/01/26

Shoals Technologies Group Inc (SHLS) is not a strong buy for a beginner, long-term investor at this moment. The stock lacks immediate positive trading signals, faces recent analyst downgrades, and has mixed financial performance. While there are positive catalysts in the clean energy sector, the company's recent net income drop and lack of clear upward momentum suggest a cautious approach.

Technical Analysis

The technical indicators are mixed. The MACD is positive but contracting, RSI is neutral at 49.741, and moving averages are bullish (SMA_5 > SMA_20 > SMA_200). However, the stock is trading near its pivot level of 9.265, with resistance at 9.876 and support at 8.654. This suggests limited immediate upside potential.

Options Data

Bullish

Open Interest Put-Call Ratio

Bullish

Option Volume Put-Call Ratio

Technical Summary

Sell

Buy

Positive Catalysts

Hedge funds are significantly increasing their positions, with a 1800.39% increase in buying over the last quarter.
The clean energy sector is expected to see steady growth in 2026 due to reduced policy uncertainties and strong bookings.
Shoals' record backlog of $721M highlights strong demand for its products.

Neutral/Negative Catalysts

Morgan Stanley downgraded the stock to Equal Weight from Overweight, citing pricing competition and market share challenges.
The stock has a 70% chance of declining by -0.59% in the next day and -1.75% in the next month.
Recent financials show a significant drop in net income (-4549.06% YoY) despite revenue growth.

Financial Performance

In Q3 2025, Shoals Technologies reported a 32.93% YoY increase in revenue to $135.8M. However, net income dropped significantly by -4549.06% YoY to $11.88M. Gross margin improved to 35.41% (up 55.51% YoY), but the sharp decline in net income raises concerns about profitability.

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

Analyst sentiment is mixed. Morgan Stanley downgraded the stock with a reduced price target of $9.50, while other analysts like Guggenheim, Goldman Sachs, Roth Capital, and UBS raised their price targets, citing strong backlog and opportunities in battery storage and data centers. However, medium-term margin visibility remains limited.

13 Analyst Rating

Wall Street analysts forecast SHLS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SHLS is 11.04 USD with a low forecast of 7 USD and a high forecast of 15 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

11 Buy

2 Hold

0 Sell

Strong Buy

Current: 10.150

Low

Averages

11.04

High

Current: 10.150

Low

Averages

11.04

High

Morgan Stanley

Overweight -> Equal Weight

downgrade

$11

AI Analysis

2025-12-16

Reason

Morgan Stanley

Price Target

$11

AI Analysis

2025-12-16

downgrade

Overweight -> Equal Weight

Reason

Morgan Stanley downgraded Shoals Technologies to Equal Weight from Overweight with a price target of $9.50, down from $11. The firm adjusted ratings in the clean technology space as part of its 2026 outlook. Demand fundamentals should "reemerge as the driving force" for the sector in 2026 amid improved policy clarity, the analyst tells investors in a research note. Morgan Stanley is bullish on data center growth, which is believes creates constructive outlooks on gas, solar, storage, and fuel cells. It cites pricing competition and potential market share challenges for the downgrade of Shoals.

Guggenheim

Joseph Osha

Buy

maintain

$8 -> $12

2025-11-11

Reason

Guggenheim

Joseph Osha

Price Target

$8 -> $12

2025-11-11

maintain

Buy

Reason

Guggenheim analyst Joseph Osha raised the firm's price target on Shoals Technologies to $12 from $8 and keeps a Buy rating on the shares following the company's release of its Q3 results last week. The firm views its revised target EBITDA multiple of 15.9-times its 2026 estimates as "moderately extended," but also notes that consensus expectations for 2026 "appear to be too low" based on its recent conversations with the company, the analyst tells investors.

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SHLS Should I Buy

SHLS Should I Buy

Should You Buy Shoals Technologies Group Inc (SHLS) Today? Analysis, Price Targets, and 2026 Outlook.

Technical Analysis

Options Data

Technical Summary

Positive Catalysts

Neutral/Negative Catalysts

Financial Performance

Growth

Profitability

Efficiency

Analyst Ratings and Price Target Trends

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