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ZYBERNO

Stock Report

Updated Aug 31, 2026

Shoals Technologies Group, Inc. (SHLS)

Technology • NASDAQ

$7.14

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

30.0/100

WEAK BUSINESS

Shoals Technologies Group, Inc. (SHLS) scores 30/100 — weak fundamentals with mixed indicators requiring careful analysis before acting.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full SHLS quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

Margin of Safety unavailable — insufficient data for the owner-earnings DCF.

BRINA GAP ↗

Is the market underestimating or overestimating what this business is capable of going forward?

-5.1%

Slight Overestimate

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full SHLS valuation analysis · → View full SHLS Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):POOR (5.3%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.29x)

Operating Margin (Operational Efficiency):AVERAGE (10.6%)

Return on Capital (Capital Efficiency):POOR (9.1%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

Shoals Technologies Group, Inc. (SHLS) stock report — Zyberno Score 30/100 (WEAK BUSINESS). Full financial analysis on Zyberno.

According to Zyberno's DCF model, Shoals Technologies Group, Inc. (SHLS) shows a Brina Gap of -5.1%, which weakens the case: based on the company's ROIC (9.1%) and reinvestment rate (33.0%), the business can fundamentally grow at 3.0% — but the current enterprise value implies the market expects 8.1%.

Over the trailing twelve months, SHLS generated -$54.57M in Owner Earnings. Capital was deployed as follows: $37.48M invested in capital expenditures. Reinvestment rate: 33.0%.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:7.14

Market Cap:$1.20B

Valuation Multiples (4)

P/E Ratio:

37.58x

📊 Click to view full SHLS P/E analysis →

P/B Ratio:1.94x

P/S Ratio:2.04x

Peg Ratio:0.64x

Enterprise Metrics (2)

Enterprise Value:$1.22B

Ev Ebitda Ratio:14.56x

Price Action & Momentum (3)

12-1 Momentum:

+74.1% (94th pctile)

📈 Click to view full SHLS Momentum analysis →

Momentum Percentile:94 / 100

% of 52-Week High:54.2%

B. Profitability Assessment

Return Metrics (7)

ROE:

5.3%

📊 Click to view full SHLS ROE analysis →

ROA:3.3%

Roic:

9.1%

📊 Click to view full SHLS ROIC analysis →

Reinvestment Rate:33.0%

Fundamental Growth Rate (g):3.0%

Market-Implied Growth Rate:8.1%

Brina Gap:

-5.1%

☷ Click to view full SHLS Brina Gap analysis →

Margin Analysis (3)

Operating Margin Ttm:10.6%

Net Margin Ttm:5.4%

Ebitda Margin:14.3%

TTM Performance (3)

Gross Margin Ttm:31.9%

Operating Margin Ttm:10.6%

Net Margin Ttm:5.4%

Yield Metrics (2)

Earnings Yield:$2.66

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

+0.18

📊 Click to view full SHLS Earnings Surprise analysis →

EPS Surprise vs Expected:78.0%

Latest Earnings Filed:2026-08-04

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):9.7%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):-20.2%

Cash Flow Growth (Linear) (2)

Free Cash Flow Growth Rate (Linear):-13.3%

Operating Cash Flow Growth Rate (Linear):-1.8%

Operating Growth (Linear) (1)

Operating Income Growth Rate (Linear):-19.1%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:2.25x

Quick Ratio:1.12x

Cash Ratio:0.10x

Leverage Analysis (3)

Debt To Equity Ttm:0.29x

Debt-to-Equity Ratio:0.29x

Debt To Ebitda:0.48x

Coverage Ratios (2)

Interest Coverage Ratio:4.81x

Times Interest Earned:4.81

Capital Structure (4)

Working Capital:204,982,000.00

Cash And Cash Equivalents:15,724,000.00

Long Term Debt:$37.06M

Net Debt:$24.55M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $588.06M

Linear Growth: 9.7%

📊 Click to view full SHLS Revenue analysis & methodology →

Cost Of Revenue Ttm:$400.36M

Profitability Breakdown (2)

Gross profit TTM: $187.70M

Linear Growth: 5.2%

📊 Click to view full SHLS Gross Profit analysis & methodology →

Operating income TTM: $62.52M

Linear Growth: -19.1%

📊 Click to view full SHLS Operating Income analysis & methodology →

Bottom Line Performance (3)

Net income TTM: $31.84M

Linear Growth: -20.2%

📊 Click to view full SHLS Net Income analysis & methodology →

Income Before Tax:$48.52M

Ebitda Ttm:84,115,000.00

Operating Expenses (5)

Operating Expenses:125,186,000.00

R And D Expense:0.00

Sga Expense:116,246,000.00

Income Tax Expense:$12.80M

Interest Expense:11,720,000.00

Expense Ratios (3)

R And D To Revenue Percentage:0.0%

Sga To Revenue Percentage:71.2%

Ebitda Margin:14.3%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$1.02B

Current Assets:$369.46M

Ppe Net:63,265,000.00

Goodwill:69,941,000.00

Intangible Assets:$29.71M

Liability Structure (4)

Total Liabilities:399,681,000.00

Current Liabilities:164,476,000.00

Long Term Debt:$37.06M

Short Term Debt:$3.22M

Equity & Capital (3)

Equity:$617.22M

Retained Earnings:$143.99M

Common Stock:0.00

Working Capital Items (3)

Accounts Receivable:134,822,000.00

Inventory:184,720,000.00

Accounts Payable:65,981,000.00

Special Items (2)

Contract Liabilities:55,245,000.00

Stock Based Compensation:4,400,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: -$39.94M

Linear Growth: -1.8%

Free cash flow TTM: -$77.42M

Linear Growth: -13.3%

📊 Click to view full SHLS Free Cash Flow analysis & methodology →

Investment Activities (2)

Investing Cash Flow:-$7.65M

Capital Expenditures Ttm:37,482,000.00

Financing Activities (3)

Financing Cash Flow:$43.65M

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:21,600,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):0.19

Eps diluted TTM: $0.19

Linear Growth: -25.0%

📊 Click to view full SHLS EPS analysis & methodology →

Earnings Per Share Ttm:$0.19

Revenue & Cash Per Share (2)

Sales Per Share Ttm:3.50

Operating Cash Flow Per Share:$0.10

Book Value & Capital (2)

Book Value Per Share:$3.67

Cash Per Share:0.09

Dividend Policy (1)

Dividend Payout Ratio:0.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.62x

Working Capital Turnover Ttm:2.87x

Receivables Management (2)

Receivables Turnover Ttm:4.36x

Days Sales Outstanding Ttm:83.68

Inventory Management (2)

Inventory Turnover Ttm:2.17x

Days Inventory Outstanding Ttm:168.41

Payables & Cash Cycle (2)

Days Payable Outstanding:60.15

Cash Conversion Cycle:191.93

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:100.00

Quality Score:80.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (1)

-$54.57M

Damodaran Growth Analysis (4)

Reinvestment Rate:33.0%

Fundamental Growth Rate (g):3.0%

Market-Implied Growth Rate:8.1%

Brina Gap:

-5.1%

☷ Click to view full SHLS Brina Gap analysis →

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (3)

Revenue Growth Rate (Linear):9.7%

Net Income Growth Rate (Linear):-20.2%

Operating Income Growth Rate (Linear):-19.1%

Cash Flow Growth Rates (2)

Free Cash Flow Growth Rate (Linear):-13.3%

Operating Cash Flow Growth Rate (Linear):-1.8%

Other Growth Rates (2)

Gross Profit Growth Rate (Linear):5.2%

Book Value Growth Rate (Linear):44.5%

C. Company Profile & Context

Corporate Information (6)

Symbol:SHLS

Company Name:Shoals Technologies Group, Inc.

Sector:Technology

Industry:Semiconductors

Exchange:NASDAQ

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:low

Volume Category:N/A

Share Structure (3)

Shares Outstanding:168.06M

Shares Outstanding Basic:168.06M

Shares Outstanding Diluted:170.02M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-31 13:51:04 UTC

Data Timestamp:2026-08-31T13:51:04.435350