There's been a major selloff in Shoals Technologies Group, Inc. (NASDAQ:SHLS) shares in the week since it released its yearly report, with the stock down 24% to US$3.49. Revenues were in line with forecasts, at US$399m, although statutory earnings per share came in 16% below what the analysts expected, at US$0.14 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Shoals Technologies Group

After the latest results, the 22 analysts covering Shoals Technologies Group are now predicting revenues of US$428.0m in 2025. If met, this would reflect a credible 7.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 88% to US$0.27. In the lead-up to this report, the analysts had been modelling revenues of US$441.5m and earnings per share (EPS) of US$0.29 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The consensus price target fell 7.4% to US$6.61, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Shoals Technologies Group analyst has a price target of US$10.50 per share, while the most pessimistic values it at US$4.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Shoals Technologies Group's revenue growth is expected to slow, with the forecast 7.2% annualised growth rate until the end of 2025 being well below the historical 25% p.a. growth over the last five years. Compare this to the 130 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.4% per year. So it's pretty clear that, while Shoals Technologies Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shoals Technologies Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Shoals Technologies Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Shoals Technologies Group going out to 2027, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Shoals Technologies Group that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.