Solar Tracking System Supplier Array Technologies (NASDAQ: ARRY) the stock fell below its pandemic lows despite improving business. The Company manufactures and supplies single-axis solar tracking systems that enable the optimal positioning of a solar panel to increase the production of clean, renewable energy. Its systems reduce lifetime costs by more than 7% and reduce operating and maintenance lifetime by more than 31%. The Company fully embraces the ESG theme by making solar energy systems more efficient. However, one look at the appalling stock price crash would make you think the company was going bankrupt. The shares peaked at $54.78 in January 2021 and fell to a low of $8.28 on February 24, 2022, before staging a rally that ran out of steam again. Inflationary pressures hit hard with significant spikes in commodity and material prices as well as increased logistics costs. Historically, these costs tend to go down, not up. These headwinds slashed margins causing a hiccup accentuated by the postponement of deliveries to the following quarter. Management thinks this is transitional and with a newly appointed CEO, investors might see light at the end of the tunnel. The company continues to grow in revenue and is heading for profitability next year as it passes the $1 billion revenue mark. Cautious and patient investors can watch for opportunistic pullbacks to move into a position.
Publication of results for the fourth quarter of fiscal 2021
On April 5, 2022, Array released fourth quarter fiscal 2021 results for the quarter ending December 2021. The company reported earnings per share (EPS) of (-$0.06) excluding one-time items , missing consensus analyst estimates of (-$0.03), from $0.03. Revenue rose 21.8% year-over-year (YoY) to $219.88 million, beating analyst estimates of $213.19 million. Supply chain disruptions have led to higher material costs. Contracts and awards executed reached a new record high of $1.8 billion on December 31, 2021.
Online guidelines for the year 2022
Array raised its fiscal 2022 earnings forecast with EPS of between $0.55 and $0.74 from analysts’ consensus estimate of $0.71. Revenue for fiscal year 2022 is estimated between $1.45 billion and $1.75 billion, beating analyst consensus estimates of $1.46 billion. The company has appointed a new CEO Kevin Hostetler of Rotork. Array CEO Jim Fusaro commented We generated revenue in line with expectations for the fourth quarter and full year of 2021. That said, our revenue and adjusted EBITDA for the full year 2021 were impacted by approximately $7 million through the transfer of income to future periods. due to the restatement of the first three quarters of 2021 as disclosed in our Form 8-K filed on March 29, 2022. It is important to reiterate, however, that the total contractual revenue and cash flow for these projects remains unchanged and that this change is just a matter of timing.
Takeaways from the conference call
CEO Fusaro highlighted the three main risks of the sector and how the company is mitigating them. The first was rising raw material and logistics costs. Array provides fixed tracking pricing and confidence in material availability to combat price volatility for customers. The global tightening of supply chains and available logistics has resulted in longer delivery times, making it more difficult to get the right parts to the right destinations in a timely manner. Array added 20 new suppliers with its acquisition of STI to help ease pressures resulting from supply chain disruption. Finally, the US regulatory environment is fostering uncertainty with a potential headwind from the AD/CVD investigation. Array is not directly affected as they do not procure modules, but their availability does impact their customers with their build schedules. This in turn has an impact on Array. They actively provided outreach initiatives in Washington, DC to educate Congress, while engaging customers to verify the certainty of module supplies. Array works with on-site customers for module replacement redesign efforts as needed. The acquisition of STI has also allowed Array to diversify its business internationally, which offsets some of the exposure in the United States. He concluded: “Over the past few years, we have transformed into a global leader in renewable energy with an incredible platform to grow even further. The pieces are in place and I can’t wait to see the great things this company does in the future. I would therefore like to thank not only my management team, but the entire organization for their support over the past few years. It’s been quite a journey.”
ARRY Opportunistic Withdrawal Levels
Using rifle charts over weekly and daily time frames provides an accurate view of the landscape for the ARRY stock. Rifles chart weekly downtrend hit an initial low at $18.02 Fibonacci level (fib).
The weekly weak market structure (MSL) buying triggered a breakout at $11.84 as shares peaked at $13.96 before falling back into profit. The weekly Rifle chart is in a decisive setup that will either resolve to a Reverse Pup Breakdown or a Stochastic Mini Pup Breakout. The weekly 5-period moving average (MA) is stuck at $11.41 with a 15-period MA at $11.17. The weekly lower Bollinger Bands (BB) lie at $3.35 and the 50-period MA at $16.07. The weekly Stochastic had a mini-pup that rolled into the 20 band but is stagnating just below the 40 band as stocks fall. The Rifles daily chart is trending lower with the falling 5 period MA crossing the resistance of the 50 period MA at $10.65 with the 15 period MA falling to $11.82. The daily BB lower sits at $8.62. On the upside, the daily BB upper sits at $15.02 and the daily 200-period MA sits at $15.69. The daily stochastic makes a full swing through the 20 band on a mini reverse pup. Prudent investors can monitor opportunistic withdrawal levels at $8.70, $8.02 fib, $7.46, $6.64 fib, $5.59 and $4.44 fib levels. The upward trajectories range from the $13.09 fib level to the $19.78 fib level.
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