Contrasting Solarmax Technology (NASDAQ:SMXT) and Shoals Technologies Group (NASDAQ:SHLS)

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

Valuation and Earnings

This table compares Solarmax Technology and Shoals Technologies Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Solarmax Technology	$22.99 million	2.13	-$34.96 million	($0.19)	-4.75
Shoals Technologies Group	$399.21 million	3.71	$24.13 million	$0.20	44.25

Shoals Technologies Group has higher revenue and earnings than Solarmax Technology. Solarmax Technology 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Solarmax Technology	-18.40%	N/A	-21.50%
Shoals Technologies Group	7.66%	8.50%	6.01%

Risk and Volatility

Solarmax Technology has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500. Comparatively, Shoals Technologies Group has a beta of 1.71, suggesting that its stock price is 71% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Solarmax Technology and Shoals Technologies Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Solarmax Technology	1	0	0	0	1.00
Shoals Technologies Group	2	7	13	0	2.50

Shoals Technologies Group has a consensus target price of $8.84, indicating a potential downside of 0.09%. Given Shoals Technologies Group’s stronger consensus rating and higher possible upside, analysts clearly believe Shoals Technologies Group is more favorable than Solarmax Technology.

Summary

Shoals Technologies Group beats Solarmax Technology on 12 of the 12 factors compared between the two stocks.

About Solarmax Technology

SolarMax Technology, Inc., through its subsidiaries, operates as an integrated solar energy company in the United States and China. The company engages in the sale and installation of photovoltaic and battery backup systems; sale of LED systems; and identifying and procuring solar farm projects for resale to third parties, as well as provision of engineering, procuring, and construction services for solar farm projects. It serves residential, commercial, and government customers. SolarMax Technology, Inc. was incorporated in 2008 and is headquartered in Riverside, California.

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.