Shoals Technologies Group (SHLS) is seeing faster purchase decisions from customers due to uncertainty about tariffs, combined with strong construction starts this year, which helps reduce the risk for 2025 sales, Oppenheimer said in a Thursday note.

Oppenheimer analysts said they hosted Shoals Technologies Chief Financial Officer Dominic Bardos for a discussion and are slightly increasing their estimates in response. The analysts said the company reported "healthy" activity in the year-to-date, with customers increasing their use of crystalline silicon, or C-Si, inventory to mitigate tariff risks.

The analysts said that, in terms of policy, Shoals Technologies' recent visit to Washington, D.C., reinforces the idea that Republicans support an all-inclusive energy approach and that funding from the Inflation Reduction Act remains popular in Republican-led states. The analysts said that labor shortages seem to be worsening, which strengthens Shoals Technologies' value proposition. Lastly, claims related to shrinkage have slowed, and remediation expenses are currently lower than the warranty charges recorded so far, they said.

The analysts said they updated their fiscal year 2025 revenue, adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, and non-GAAP earnings per share estimates to $431 million, $105 million, and $0.45, respectively, up from $427 million, $104 million, and $0.44. For fiscal year 2026, they revised estimates to $497 million in revenue, $142 million in adjusted EBITDA, and $0.61 in EPS, up from $493 million, $141 million, and $0.60, respectively.

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