TD Cowen has adjusted its outlook on Array Technologies (NASDAQ:ARRY), reducing the price target on the company's shares to $11.50 from the previous $16.50. The firm sustained its Hold rating on the stock.
Array Technologies reported its second-quarter results for 2024, surpassing consensus expectations with a solid performance. Despite the positive outcome, the company's full-year guidance for 2024 was affected by project delays. These delays have led to a $375 million, or 28%, reduction in the midpoint revenue expectation for the fiscal year.
In the recent quarter, Array Technologies managed to secure $429 million in new bookings. However, the total order book has experienced a decline, settling at $2.0 billion.
This decrease is attributed to several factors, including adjustments related to changes in commodity prices, modifications in project scopes, and the impacts of foreign exchange rates.
The adjustments to the company's order book and the reduced revenue forecast for the fiscal year were significant factors in TD Cowen's decision to lower the price target.
Despite these challenges, Array Technologies' ability to exceed consensus expectations in the second quarter indicates a level of resilience in its operational performance.
Recently, BMO Capital Markets lowered Array's price target to $11 from $15 while maintaining a Market Perform rating. Similarly, Piper Sandler revised its price target from $14.00 to $8.00, and Roth/MKM downgraded the stock from Buy to Neutral. On a positive note, Citi upgraded the company to 'Buy', despite a decrease in the price target to $14.00, anticipating a recovery of lost market share and a record backlog by 2024.
Recent developments have shown that Array Technologies reported Q1 revenue of $153 million, slightly above their high-end guidance, and adjusted gross margins of 38.3%. Despite these figures, the company faced project delays in the United States and Brazil, leading to Oppenheimer reducing its price target to $17 from $20.
Array Technologies remains committed to its full-year revenue guidance of $1.25 billion to $1.4 billion. However, the recent resignation of CFO Kurt Wood has sparked investor concerns. Analysts continue to monitor the company's financial health and market performance closely.
InvestingPro Insights
As Array Technologies (NASDAQ:ARRY) adjusts to market dynamics and revised financial outlooks, real-time data from InvestingPro provides a deeper understanding of the company's current valuation and performance. With a market capitalization of $1.06 billion and a forward-looking P/E ratio of 24.45, Array Technologies is trading at a high Price/Book multiple of 5.91. This valuation metric is particularly noteworthy as it suggests that the market may be pricing the company's assets optimistically relative to its book value.
InvestingPro Tips highlight that while analysts expect net income to grow this year, they also anticipate a sales decline in the current year. This juxtaposition of expected income growth against sales decline could signal efficiency improvements or cost reductions. Furthermore, Array Technologies is operating with a moderate level of debt and has liquid assets that exceed short-term obligations, which may offer some financial stability in the face of revenue fluctuations.
Despite recent project delays and reductions in the company's order book, InvestingPro Tips also point out that Array Technologies is trading near its 52-week low. This might present a potential entry point for investors who believe in the company's long-term fundamentals and are willing to tolerate the stock's volatility. For those interested in exploring additional insights, InvestingPro offers further tips on Array Technologies, which can be accessed through the dedicated InvestingPro platform.
Investors considering Array Technologies should note that the company does not pay a dividend, which aligns with its growth-oriented investment thesis. As the market digests the revised guidance and TD Cowen's adjusted price target, these InvestingPro insights could help investors make more informed decisions regarding their positions in Array Technologies.
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