Last Update 05 Apr 26

Fair value Decreased 0.22%

ARRY: Record Backlog And July Safe Harbor Deadline Will Drive Repricing

Array Technologies' updated analyst price target edges slightly lower to around $10.04 from $10.07, as analysts factor in reduced margin assumptions and lower future P/E expectations following mixed post earnings revisions, even as bookings and backlog remain key focal points in recent research.

Analyst Commentary

Recent research around Array Technologies points to a split view, with several firms trimming price targets after the latest earnings update while still highlighting areas of potential strength. Others are more cautious, focusing on margins, guidance and the quality of growth.

Bullish Takeaways

Bullish analysts see the sharp share price reset of about 33% after earnings as creating a discount to peers, which they view as meaningful relative to the company’s record backlog.
Some research points to strong Q4 bookings and revenue and references mid-teens growth guidance for 2026 supported by the APA acquisition as support for a constructive long term growth narrative.
There is continued focus on management’s aim to return to a high teens EBITDA profile, with several bullish analysts describing their stance as cautiously optimistic even after moderating valuation assumptions.
Certain firms highlight improving execution, low investor expectations and a valuation gap versus peers as reasons to take a more positive stance, especially with specific industry timing catalysts such as the July 4 safe harbor deadline being flagged.

Bearish Takeaways

Bearish analysts emphasize cuts to price targets across the board, with multiple firms resetting their targets into the US$7 to US$11 range and one firm moving its rating to Hold, signaling more muted upside assumptions.
Several reports flag softer than expected margin guidance and a soft margin profile for 2026, with some pointing out that steps to shore up backlog have come at the expense of margins, which feeds into more conservative P/E and EBITDA expectations.
Updates to models post earnings often center on mixed Q4 results, including strong bookings but margin guidance that missed expectations, and lower forward guidance even as bookings remain strong.
Some bearish analysts question the quality of growth, pointing to a messy product transition around the H250 product, the removal of significant STI backlog, and the view that a significant portion of historic growth has come from acquisitions while the cost of preferred equity remains a large share of 2026 EBITDA guidance.

What's in the News

Array Technologies reported goodwill impairment charges of $102,560,000 for the fourth quarter ended December 31, 2025, compared with $74,000,000 a year earlier (Key Developments).
The company issued earnings guidance for the first quarter of fiscal 2026, with revenue expected to be approximately $200,000,000 (Key Developments).
For full year 2026, Array Technologies expects revenue in the range of $1.4b to $1.5b (Key Developments).

Valuation Changes

Fair Value: trimmed slightly from $10.07 to $10.04, reflecting modestly lower model assumptions.
Discount Rate: reduced from 11.86% to 11.17%, implying a somewhat lower required return in the updated analysis.
Revenue Growth: adjusted marginally higher from 8.99% to 9.18%, signaling a small change in expected top line expansion.
Net Profit Margin: moved slightly higher from 4.78% to 4.81%, indicating a very small shift in projected profitability.
Future P/E: eased from 27.10x to 26.27x, pointing to a modest compression in the valuation multiple used in forecasts.

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Key Takeaways

Strong growth driven by innovative products, improved margins, and expanding market share, with a favorable industry outlook supporting sustained revenue and earnings momentum.
Strategic diversification into new markets, proactive supply chain moves, and regulatory compliance enhance long-term stability and competitive positioning.
Regulatory and market uncertainties, rising costs, and intensified competition threaten revenue stability, margin strength, and long-term growth prospects.

Catalysts

About Array Technologies

Manufactures and sells solar tracking technology products in the United States, Spain, Brazil, Australia, and internationally.What are the underlying business or industry changes driving this perspective?

Rapid year-over-year and sequential volume growth (84% YTD and 52% quarterly increase) driven by market share gains, strong customer engagement with utilities and developers, and accelerated adoption of new products (OmniTrack, SkyLink, Hail XP), positioning Array to capitalize as utility-scale solar installations expand-supporting sustained top-line (revenue) and earnings growth.
Enhanced product mix and technology innovation, with over 35% of the order book for recently launched, higher-value products targeting challenging terrains and emerging extreme weather concerns, increasing pricing power and supporting margin expansion, thus improving gross margins and earnings.
Diversification and expansion into international markets and new high-growth segments (such as engineered foundation solutions and fixed-tilt systems via pending APA Solar acquisition), increasing the total addressable market and reducing dependency on any single geographic or end market, supporting long-term revenue growth and margin stability.
Proactive supply chain optimization and onshoring, including delivering 100% domestic content trackers compliant with evolving regulations and incentives, reinforcing Array's competitive positioning and ensuring eligibility for government support, which boosts demand visibility and protects/reduces margin volatility.
Continued industry tailwinds from large-scale decarbonization initiatives, falling solar power costs, and heightened corporate ESG/net-zero commitments signal robust multi-year demand for utility-scale solar and tracking solutions, providing a favorable backdrop for long-term revenue, backlog growth, and sustained earnings momentum.

Array Technologies Earnings and Revenue Growth

Array Technologies Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Array Technologies's revenue will grow by 9.2% annually over the next 3 years.
Analysts assume that profit margins will increase from -8.7% today to 4.8% in 3 years time.
Analysts expect earnings to reach $80.4 million (and earnings per share of $0.39) by about April 2029, up from -$112.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $160.1 million in earnings, and the most bearish expecting $28.9 million.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 26.4x on those 2029 earnings, up from -10.0x today. This future PE is lower than the current PE for the US Electrical industry at 32.9x.
Analysts expect the number of shares outstanding to grow by 0.2% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 11.17%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

Ongoing regulatory, policy, and tariff uncertainty in the U.S. and internationally (such as FEOC restrictions, safe harbor rule changes, and rapidly evolving tariffs including new 25% India tariffs) could delay project timelines, increase compliance costs, or reduce the economic attractiveness of solar projects, creating volatility in order intake and reducing forward revenue visibility.
High interest rates in key international markets (e.g., Brazil at 15%) and fluctuating macroeconomic conditions can suppress or delay utility-scale solar projects, resulting in uneven international bookings, decreased revenue diversification, and increased dependence on the U.S. market for growth.
Tariff and commodity price pressures-even when contractually recovered-compress gross margins through "denominator math" (passing costs at zero margin), and future step-ups in tariffs (or changes in tariff eligibility and exemptions) could further erode profitability, dampening net earnings growth.
Legacy fixed-price, low-margin contracts and ongoing project descoping, debooking, and cancellations (especially for customers who cannot execute at prior price points) demonstrate continued revenue and margin risk from order book volatility, as well as heightened sensitivity to steel prices and project timing, impacting near-to-medium term earnings predictability.
Maturation and commoditization of the solar tracker market, potential emergence of disruptive technologies (such as integrated module tracking or stationary tilt solutions), and increased domestic content requirements could intensify competition, threaten product differentiation, and erode pricing power, putting long-term pressure on both revenue growth and profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $10.04 for Array Technologies based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $16.0, and the most bearish reporting a price target of just $6.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $1.7 billion, earnings will come to $80.4 million, and it would be trading on a PE ratio of 26.4x, assuming you use a discount rate of 11.2%.
Given the current share price of $7.34, the analyst price target of $10.04 is 26.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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