Array Technologies: A Balanced Hold Rating Amidst Market Challenges and Operational Strengths

Analyst Ameet Thakkar of BMO Capital maintained a Hold rating on Array Technologies (ARRY – Research Report), retaining the price target of $16.00.

Ameet Thakkar has given his Hold rating due to a combination of factors surrounding Array Technologies’ recent performance and market positioning. The company’s strong first-quarter earnings beat, support of the 2024 guidance, and a record backlog of $2.1 billion are positive indicators that suggest a healthy operational state. However, the cautious approach stems from the need to observe the full impact of the company’s recent pricing strategy adjustments and their long-term effect on margins, despite management’s optimism regarding sustaining low-30% gross margins through 2024.
Moreover, Thakkar acknowledges the company’s effective cost management and competitive product offerings, such as the DuraTrack and H250 products. Array Technologies’ resilience against severe hail damage in Texas and adaptability amidst trade disputes enhance its profile. Nonetheless, the hold rating also reflects a concern over the company’s recent market share loss, which raises questions about ARRY’s competitive stance in the long term. These factors together prompt a cautious but not bearish outlook, leading to the reaffirmation of the Market Perform rating and a $16 price target.

In another report released today, Jefferies also maintained a Hold rating on the stock with a $15.00 price target.

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Array Technologies (ARRY) Company Description:

Array Technologies Inc manufacturers of ground-mounting systems used in solar energy projects. The company’s product is an integrated system of steel supports, electric motors, gearboxes and electronic controllers referred to as a single-axis tracker that move solar panels throughout the day to maintain an optimal orientation to the sun, which increases their energy production. Its operations are in United States, Australia, and Rest of the World with United States deriving majority of the revenue.