Head to Head Analysis: Shoals Technologies Group (NASDAQ:SHLS) versus SolarEdge Technologies (NASDAQ:SEDG)

Shoals Technologies Group (NASDAQ:SHLS) and SolarEdge Technologies (NASDAQ:SEDG) are both energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Profitability

This table compares Shoals Technologies Group and SolarEdge Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shoals Technologies Group	5.27%	7.57%	5.32%
SolarEdge Technologies	-177.64%	-191.53%	-49.83%

Risk and Volatility

Shoals Technologies Group has a beta of 1.65, suggesting that its stock price is 65% more volatile than the S&P 500. Comparatively, SolarEdge Technologies has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500.

Insider & Institutional Ownership

95.1% of SolarEdge Technologies shares are held by institutional investors. 1.7% of Shoals Technologies Group shares are held by company insiders. Comparatively, 0.7% of SolarEdge Technologies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Shoals Technologies Group and SolarEdge Technologies”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shoals Technologies Group	$399.21 million	4.25	$24.13 million	$0.13	77.92
SolarEdge Technologies	$901.46 million	2.64	-$1.81 billion	($29.96)	-1.34

Shoals Technologies Group has higher earnings, but lower revenue than SolarEdge Technologies. SolarEdge Technologies is trading at a lower price-to-earnings ratio than Shoals Technologies Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Shoals Technologies Group and SolarEdge Technologies, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shoals Technologies Group	2	5	14	0	2.57
SolarEdge Technologies	11	18	0	0	1.62

Shoals Technologies Group currently has a consensus price target of $7.79, suggesting a potential downside of 23.10%. SolarEdge Technologies has a consensus price target of $20.44, suggesting a potential downside of 49.05%. Given Shoals Technologies Group’s stronger consensus rating and higher possible upside, analysts plainly believe Shoals Technologies Group is more favorable than SolarEdge Technologies.

Summary

Shoals Technologies Group beats SolarEdge Technologies on 12 of the 14 factors compared between the two stocks.

About Shoals Technologies Group

Shoals Technologies Group, Inc. provides electrical balance of system (EBOS) solutions and components for solar, battery energy, and electric vehicle (EV) charging applications in the United States and internationally. The company designs, manufactures, and sells system solutions for both homerun and combine-as-you-go wiring architectures, as well as offers technical support services. It provides EBOS components, including combiners; plug-n-play branch connectors and inline fuses; AC disconnects; recombiners; wireless monitoring; junction boxes; wire management; EV power cabinets; and battery energy storage systems cabinets, as well as cable assemblies, transition enclosures, and splice boxes. In addition, the company offers eMobility solutions, such as a power center, which combines equipment needed to protect the charging equipment and transform voltage levels from the electric utility to those needed on the respective site; quick connect solutions for chargers to connect to the Shoals system; big lead assembly (BLA) technology in the EV space to connect multiple chargers to a single power center; and a raceway system that protects the above ground EV BLAs in walk over and drive over applications. Further, it provides Snapshot IV, a solar operations and maintenance solution that monitors the specific voltage and current of individual solar panels and compares the results against the manufacturer's projected performance. The company sells its products to engineering, procurement, and construction firms that build solar energy projects; utilities; solar developers, independent power producers; solar module manufacturers; and charge point operators. Shoals Technologies Group, Inc. was founded in 1996 and is headquartered in Portland, Tennessee.

About SolarEdge Technologies

SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, manufactures, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in the United States, Germany, the Netherlands, Italy, rest of Europe, and internationally. It operates in two segments, Solar and Energy Storage. The Solar segment offers power optimizers, inverters, batteries, storage solutions, electric vehicle chargers, smart tracking solutions, and smart energy management software products; Monitoring platform, a cloud-based monitoring platform, which collects power, voltage, current, and system data sent from inverters and power optimizers; and MySolarEdge app, that enables system owners to track their real-time system production and household energy consumption. This segment also provides Designer platform, an web-based tool that helps solar professionals to plan, build, and validate residential and commercial systems; Mapper application for registering the physical layout of new PV sites installed with DC optimized inverter systems; SetApp application that activates and configurate inverters; and grid services. The Energy Storage segment provides lithium-ion cells and containerized battery systems (BESS) solutions for commercial, industrial, and utility markets; modules and racks; purpose-built components and solutions, and hardware and software tools; and pre and post sales engineering support for designing, building, and managing battery and system solutions. The company offers e-mobility products, automated machines, and UPS products; and pre-sales support, ongoing trainings, and technical support and after installation services. It sells its products through solar installers and distributors, electrical equipment wholesalers, and PV module manufacturers, as well as engineering, procurement, and construction firms. SolarEdge Technologies, Inc. was incorporated in 2006 and is headquartered in Herzliya, Israel.