On Tuesday, Susquehanna has adjusted its stock price target for Array Technologies (NASDAQ: ARRY), a leading solar energy products company, bringing it down to $9 from the previous $10 while still maintaining a Positive rating on the stock. This change follows the company's third-quarter results which were disclosed last week, prompting a modest revision to the projected shipments and EBITDA for the fiscal years 2025 and 2026.
The analyst from Susquehanna noted that the Anti-Dumping/Countervailing Duty (AD/CVD) investigation and the uncertainty surrounding the recent elections had an impact on Array Technologies' new orders in the third quarter, with the company's backlog remaining consistent quarter-over-quarter.
Despite these challenges, the management of Array Technologies expressed strong confidence in achieving double-digit revenue growth in the coming year. This is supported by the analyst's own model, which forecasts approximately 29% revenue growth for the next year.
Array Technologies reported third-quarter revenue of $231 million and adjusted EBITDA of $47 million, both figures surpassing Susquehanna Financial Group's (SFG) estimates of $226 million and $45 million, respectively. The company's earnings per share (EPS) also exceeded expectations, coming in at $0.17 compared to the estimated $0.12, with the outperformance largely attributed to reduced interest and other expenses.
Despite the dip in new orders due to external factors, Array Technologies' backlog has held steady at approximately $2 billion, indicating a book-to-bill ratio of 1x. This is a noticeable change from the roughly 2x ratio observed over the previous three quarters. The company's ability to maintain a substantial backlog suggests a stable demand for its solar products and services, which could potentially translate into revenue over the next six quarters.
In other recent news, Array Technologies, a leader in solar technology, announced a revenue of $231 million in its Q3 2024 earnings call. Despite a net loss primarily due to a noncash goodwill impairment charge, the company maintains a robust adjusted gross margin of 35.4%. The company's $2 billion backlog is expected to cover approximately $1.3 billion of the forecasted revenue for the fiscal year 2025.
BMO Capital Markets revised its price target on Array Technologies to $8.00 from the previous $9.00, maintaining a Market Perform rating. The revision follows a mixed view on the company's current position and future prospects due to ongoing project delays and increased competition.
Array Technologies introduced new products, including a 77-degree tracker and SkyLink architecture, expecting to see strong double-digit growth in 2025. These recent developments suggest a balanced view of Array Technologies' performance and potential.
InvestingPro Insights
Array Technologies' recent performance and market position are further illuminated by real-time data from InvestingPro. The company's market capitalization stands at $1.01 billion, reflecting its significant presence in the solar energy sector. Despite the challenges noted in the article, Array's gross profit margin of 30.5% for the last twelve months ending Q3 2024 indicates a solid ability to control costs and maintain profitability on its sales.
InvestingPro Tips highlight that Array Technologies operates with a moderate level of debt and its liquid assets exceed short-term obligations, suggesting financial stability even in the face of industry headwinds. This aligns with the company's confidence in achieving double-digit revenue growth in the coming year, as mentioned in the article.
However, investors should note that Array's stock has experienced significant volatility, with a 47.65% price decline over the past six months. This volatility is consistent with the article's discussion of external factors affecting the company's performance, such as the AD/CVD investigation and election uncertainty.
For those seeking a deeper understanding of Array Technologies' financial health and market position, InvestingPro offers 13 additional tips, providing a comprehensive view of the company's prospects in the dynamic solar energy market.
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