Critical Comparison: Shoals Technologies Group (NASDAQ:SHLS) vs. SMART Global (NASDAQ:SGH)

Shoals Technologies Group (NASDAQ:SHLS) and SMART Global (NASDAQ:SGH) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, profitability, valuation, earnings and risk.

Risk & Volatility

Shoals Technologies Group has a beta of 1.74, indicating that its stock price is 74% more volatile than the S&P 500. Comparatively, SMART Global has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Shoals Technologies Group and SMART Global, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shoals Technologies Group	4	5	11	0	2.35
SMART Global	0	0	4	0	3.00

Shoals Technologies Group currently has a consensus price target of $11.06, suggesting a potential upside of 89.63%. SMART Global has a consensus price target of $32.25, suggesting a potential upside of 51.41%. Given Shoals Technologies Group’s higher probable upside, equities research analysts clearly believe Shoals Technologies Group is more favorable than SMART Global.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Shoals Technologies Group	5.13%	12.75%	8.38%
SMART Global	-14.35%	8.86%	2.01%

Valuation & Earnings

This table compares Shoals Technologies Group and SMART Global”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	$488.94 million	1.99	$39.97 million	$0.18	32.39
SMART Global	$1.44 billion	0.78	-$187.53 million	($3.08)	-6.92

Shoals Technologies Group has higher earnings, but lower revenue than SMART Global. SMART Global 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.

Summary

Shoals Technologies Group beats SMART Global on 10 of the 12 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 SMART Global

SMART Global Holdings, Inc., a memory-focused company, engages in the designing and development of enterprise solutions in the United States, China, Europe, and internationally. It operates through Memory Solutions, Intelligent Platform Solutions, and LED Solutions segments. The company offers dynamic random access memory modules, solid-state and flash storage, and other advanced memory solutions for networking and telecom, data analytics, artificial intelligence and machine learning applications; and supply chain services including procurement, logistics, inventory management, temporary warehousing, programming, kitting, and packaging services. It also provides Penguin Computing that focus on technical computing for core and cloud environments through HPC and AI solutions; and Penguin Edge, an edge computing solution for embedded and wireless applications including high-performance products for government, health care, industrial, and telecommunications applications. In addition, the company offers Stratus, which provides simplified, protected, and autonomous fault tolerant computing solutions in the data center and at the Edge through hardware and software services; and leading-edge solutions to education, energy, financial services, government, hyperscale, and manufacturing markets. Further, it provides LED-based products comprising blue and green LED chips based on gallium nitride, and related materials under Cree LED brand; and surface mount devices under the Cree LED XLamp and J Series brand. The company sells its products directly to original equipment manufacturers, enterprise, government and other end customers through direct sales force, e-commerce, customer service representatives, on-site field application engineers, independent sales representatives, distributors, integrators, and resellers. SMART Global Holdings, Inc. was founded in 1988 and is headquartered in Milpitas, California.