On Friday, Array Technologies (NASDAQ:ARRY) shares saw its price target lowered by Piper Sandler from the previous $14.00 to $8.00, while the firm maintained a Neutral stance on the stock.
The adjustment comes after Array Technologies joined other companies that have either cut guidance or failed to meet market expectations, a move that was anticipated by investors, albeit not to the extent of the 28% reduction announced.
The downgrade in the price target is attributed to project delays in the United States and Brazil, exacerbated by currency devaluation issues.
Despite the setbacks, Array Technologies has indicated that it expects 80% of its current backlog to be converted by the end of 2025. Additionally, the company anticipates that bookings in the second half of the year will also contribute positively to 2025's financial results.
However, Piper Sandler expresses caution regarding the company's future, citing a challenging environment that makes it difficult to predict Array Technologies' forward trajectory with confidence.
As a result, the firm has revised its revenue expectations for 2025 downward by 16% to $1.20 billion, a figure that falls 23% short of the consensus estimate among analysts.
In conclusion, Piper Sandler's reiteration of the Neutral rating reflects the firm's view on Array Technologies' valuation after adjusting the price target to $8.00 per share.
The company's visibility remains limited in the current market conditions, leading to restrained expectations for its financial performance in the near term.
In other recent news, Array Technologies has faced a flurry of analyst activity and changes in financial outlook. The company's second quarter results exceeded expectations, but the third quarter forecast was less promising, with a downward revision of approximately 30% for projected revenues, EBITDA, and EPS for 2024.
Roth/MKM downgraded Array Technologies from Buy to Neutral, citing potential project delays and a decrease in the overall backlog due to commodity price fluctuations, project scope changes, and foreign exchange impacts.
Citi, on the other hand, upgraded Array Technologies to 'Buy', despite a decrease in the price target to $14.00. This optimism stems from the anticipation of Array Technologies recovering lost market share and achieving a record backlog by 2024, along with a projected 9% free cash flow yield.
Array Technologies also reported Q1 revenue of $153 million, slightly above their high-end guidance, and adjusted gross margins of 38.3%. They maintain a full-year revenue guidance of $1.25 billion to $1.4 billion.
In terms of executive changes, CFO Kurt Wood resigned from his role, stirring investor attention towards his severance package. Wells Fargo lowered its price target from $16.00 to $14.00 due to concerns over the pace of utility-scale solar deployments. These are the recent developments for Array Technologies.
InvestingPro Insights
Array Technologies (NASDAQ:ARRY) is navigating a challenging market, as reflected in the recent price target adjustment by Piper Sandler. InvestingPro data and tips provide additional context for investors considering ARRY's position. With a market cap of approximately $1.36 billion and a P/E ratio of 24.18, the company's valuation metrics are noteworthy. Despite a significant revenue decline over the last twelve months of -21.04%, Array Technologies maintains a gross profit margin of 27.28%, which could indicate its ability to manage costs in a difficult revenue environment.
InvestingPro Tips highlight that while analysts expect net income growth this year, they also anticipate a sales decline in the current year. Additionally, the stock is trading near its 52-week low and has experienced considerable price volatility. This volatility is evidenced by a 28.14% drop in the stock's price over the last three months. However, with liquid assets surpassing short-term obligations, the company has a degree of financial flexibility.
For investors seeking a deeper dive into Array Technologies' prospects, there are over ten additional InvestingPro Tips available, which can be explored for a more comprehensive analysis. The InvestingPro Fair Value estimate stands at $13.98, suggesting potential upside from the current trading price. As the market continues to assess Array Technologies' future, these insights from InvestingPro may help investors make more informed decisions.
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