Critical Comparison: NeoVolta (NASDAQ:NEOV) & Shoals Technologies Group (NASDAQ:SHLS)

Shoals Technologies Group (NASDAQ:SHLS) and NeoVolta (NASDAQ:NEOV) are both small-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, risk, analyst recommendations, earnings, valuation, profitability and dividends.

Risk and Volatility

Shoals Technologies Group has a beta of 1.89, meaning that its share price is 89% more volatile than the S&P 500. Comparatively, NeoVolta has a beta of -0.87, meaning that its share price is 187% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Shoals Technologies Group and NeoVolta, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shoals Technologies Group	0	6	11	0	2.65
NeoVolta	1	2	4	0	2.43

Shoals Technologies Group currently has a consensus target price of $10.71, indicating a potential upside of 40.98%. NeoVolta has a consensus target price of $9.50, indicating a potential upside of 178.59%. Given NeoVolta’s higher possible upside, analysts clearly believe NeoVolta is more favorable than Shoals Technologies Group.

Earnings and Valuation

This table compares Shoals Technologies Group and NeoVolta”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	$475.33 million	2.69	$33.57 million	$0.19	40.00
NeoVolta	$8.43 million	22.90	-$5.03 million	($0.33)	-10.33

Shoals Technologies Group has higher revenue and earnings than NeoVolta. NeoVolta 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.

Institutional & Insider Ownership

5.1% of NeoVolta shares are owned by institutional investors. 0.8% of Shoals Technologies Group shares are owned by insiders. Comparatively, 4.0% of NeoVolta shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Shoals Technologies Group	5.41%	10.07%	6.38%
NeoVolta	-63.35%	-141.89%	-89.61%

Summary

Shoals Technologies Group beats NeoVolta on 10 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 NeoVolta

NeoVolta Inc. designs, manufactures, and sells energy storage systems in the United States. It provides NV14, NV14-K, and NV 24 energy storage systems, which stores and uses energy through batteries and an inverter at residential or commercial sites. The company markets and sells its products directly to certified solar installers and solar equipment distributors. NeoVolta Inc. was formed in 2018 and is headquartered in Poway, California.