On Tuesday, Barclays made an optimistic move on Array Technologies (NASDAQ: ARRY), with an upgrade in its stock rating from Equalweight to Overweight and an increase in the price target to $18.00, up from the previous target of $15.00.
The upgrade comes after a period of challenges for Array Technologies, which had seen some setbacks in execution last year, leading to a loss in market share.
"We think we see some green shoots to indicate that it will be much more competitive on a go-forward basis, which could materialize in it taking back some share," said the analyst.
Array Technologies' Average Selling Prices (ASPs) have been consistently higher than those of its competitor NXT throughout most of the last year. Recently, these prices have aligned more closely with NXT's, a change that coincides with Array's strong bookings in the fourth quarter of 2023. Additionally, management has noted an increase in the win rate over competing products.
The firm's analyst cited the robust bookings number from the fourth quarter of 2023 and management's comments on improved win rates as encouraging signs for Array Technologies. These factors contribute to the belief that the company's performance could normalize, or revert to the mean, after the previous year's difficulties.
InvestingPro Insights
Barclays' recent upgrade of Array Technologies (NASDAQ: ARRY) to Overweight reflects an optimistic outlook, and InvestingPro data provides additional context to their analysis. With a market capitalization of $2.22 billion and a P/E ratio of 25.57, the company's valuation metrics are an essential consideration for investors. Despite a revenue decline of 3.72% over the last twelve months as of Q4 2023, Array Technologies has managed to maintain a gross profit margin of 26.36%, which suggests a degree of resilience in its business model.
Two InvestingPro Tips that may be particularly relevant to investors considering Barclays' upgrade are that Array Technologies is expected to be profitable this year, and that it operates with a moderate level of debt. These insights could provide confidence in the company's financial health and its ability to navigate market conditions. Additionally, while analysts have revised earnings downwards for the upcoming period, the company's liquid assets exceeding short-term obligations indicate a solid liquidity position.
For those interested in further analysis and additional InvestingPro Tips, consider visiting https://www.investing.com/pro/ARRY. There are 9 more tips available, which could offer deeper insights into Array Technologies' financials and market performance. To enrich your investment strategy, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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