SHLSShoals Technologies Group, Inc.
Is the business good?
More warning than reassurance: profits without cash flow and margins compressing.
Mixed fundamental signals. Nine pass/fail tests of year-over-year health from the filings.
Reports an operating profit but operating cash flow is negative, a red flag. Conversion is worsening vs a year ago.
Positive operating leverage, operating profit is growing faster than sales, so margins widen as the business scales.
A balanced mix of margins, efficiency, and leverage. ROE 5% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is SHLS?
Shoals Technologies Group, Inc. earns 8.2% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 0.79 points below what the capital costs: growth destroys value
- Operating margin
- 11%
Operating margin · Solar median 4.8% · 12 months to Q2 2026
- Cash conversion
- −0.43×
Cash conversion · 1.23× a year ago · the operating profit has not turned into cash yet
- Share count, year on year
- +1.5%
Share count, year on year · shareholders own a smaller slice than a year ago
| Year | Operating margin |
|---|---|
| FY2020 | 21% |
| FY2021 | 17% |
| FY2022 | 20% |
| FY2023 | 16% |
| FY2024 | 13% |
| FY2025 | 12% |
Details›
- Gross margin12 months to Q2 2026
- 32%
- Operating margin12 months to Q2 2026
- 11%
- Net margin12 months to Q2 2026
- 5.4%
- Free cash flow margin
- −8.8%
- Revenue, trailing twelve months
- $588M
- Free cash flow, trailing twelve months
- −$52M
- Net income, trailing twelve months
- $32M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 8.2%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.