Array Technologies may be insulated from anti-circumvention, said ROTH

Array Technologies, a solar mount/tracker provider, released its fourth quarter results, and issued a strong forecast for revenues this year. This comes despite the Department of Commerce’s investigation into antidumping and anticircumvention cases levied against four Southeastern Asian countries that supply 80% of the nation’s solar panels.

In an industry note, Phil Shen, managing director, ROTH Capital Partners, said the strong guidance initially came as a surprise, as the Solar Energy Industries Association reports that roughly 75% of companies report cancelled or delayed module supply, 50% said that 80% or more of their 2022 project pipelines are at risk, and that the investigation has a “devastating negative impact” on 60% of solar and 35% of storage businesses.

However, ROTH noted that the strong guidance may be a result of a strong relationship between Array Technologies and First Solar, a US-based manufacturer of thin-film CdTe solar panels. ROTH speculates that Array may be paired with a majority or a substantial amount of the 9GW module delivery expected from First Solar this year.

Array also has a strong relationship with South Korean panel manufacturer Hanwha, which is currently not under any anti-circumvention investigation. Hanwha performs final assembly of the modules in the US and is expected to produce 2GW of modules this year. 

Maxeon is another significant partner for the tracker company. Recently, Array announced it would be paired with the 1.8 million modules that will comprise the 690MW Gemini solar project in Nevada.

With these factors in mind, ROTH reissued a “buy” rating, and set a price target of $25 per share.

ROTH noted some risks, including competition from incumbents and new entrants, new tracker technologies entering the market that may pose risks to Array’s centralized tracker systems, the rise of commodity prices squeezing margins, and weaker than expected global solar project policies.

Results

In the fourth quarter 2021, Array Technologies posted a revenue of $219.9 million, up from $180 million in the fourth quarter of 2022. Fourth quarter revenues for 2022 are estimated to be upwards of $290 million.

For the full year 2021, Array secured $853 million in revenues. This was a slight step down from 2020 revenues of $872 million; however, guidance is very strong for this year, with revenues expected to land around $1.5 billion for 2022.

The company executed a record $1.8 billion in contracts in 2021. Adjusted EBITDA was $43.2 million for the year, and an adjusted Basic and Diluted net income per share of $0.07.

“Despite a challenging 2021 it is important to re-iterate that the foundation of Array’s growth remains stronger than ever,” said Jim Fusaro, CEO. “This is most evident by the fact that we enter 2022 with $1.8 billion in executed contracts and awarded orders. To put that number in context, we have organically more than doubled the legacy Array portion from $705 million at December 31, 2020 to $1.4 billion at December 31, 2021… the legacy Array business alone is forecasted to grow at approximately 40% at our mid-point, despite the current module challenges and supply chain disruptions.”