Head-To-Head Analysis: Shoals Technologies Group (NASDAQ:SHLS) and SemiLEDs (NASDAQ:LEDS)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
SemiLEDs	-39.28%	-91.96%	-17.03%
Shoals Technologies Group	7.78%	9.83%	6.60%

Earnings & Valuation

This table compares SemiLEDs and Shoals Technologies Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SemiLEDs	$5.18 million	1.78	-$2.04 million	($0.37)	-3.46
Shoals Technologies Group	$422.66 million	2.22	$39.97 million	$0.20	28.20

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

Insider & Institutional Ownership

76.3% of SemiLEDs shares are owned by institutional investors. 52.1% of SemiLEDs shares are owned by company insiders. Comparatively, 0.4% of Shoals Technologies Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for SemiLEDs and Shoals Technologies Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SemiLEDs	0	0	0	0	0.00
Shoals Technologies Group	3	6	14	0	2.48

Shoals Technologies Group has a consensus target price of $10.64, indicating a potential upside of 88.70%. Given Shoals Technologies Group’s stronger consensus rating and higher probable upside, analysts plainly believe Shoals Technologies Group is more favorable than SemiLEDs.

Risk and Volatility

SemiLEDs has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, Shoals Technologies Group has a beta of 1.69, indicating that its share price is 69% more volatile than the S&P 500.

Summary

Shoals Technologies Group beats SemiLEDs on 12 of the 14 factors compared between the two stocks.

About SemiLEDs

SemiLEDs Corporation develops, manufactures, and sells light emitting diode (LED) chips, LED components, and LED modules and systems in the United States, Taiwan, the Netherlands, Germany, Japan, and internationally. The company also sells enhanced vertical, LED product series in blue, white, green, and UV; LED chips to packagers or distributors; and lighting products primarily to original design manufacturers of lighting products and the end-users of lighting devices, as well as packs and sells its LED chips. Its products are used for general lighting applications, including commercial, industrial, and residential lighting; and specialty industrial applications, such as ultraviolet or UV, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, germicidal and viricidal devices LED lighting for horticulture applications, architectural lighting, and entertainment lighting. The company was incorporated in 2005 and is based in Chu-Nan, Taiwan.

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.