Solar stock Array Technologies rebounded from nearly two-month lows following its preliminary Q4 numbers Thursday. And analysts expect outstanding profit growth for Array, a 2023 UBS top stock pick for 2023.
Array Technologies makes solar trackers, which allow solar panels to follow the sun for maximum energy production.
Array announced preliminary full-year 2022 results Thursday, which started a three-day stock rally.
CEO Kevin Hostetler said the company's expected full-year revenue of more than $1.6 billion represents organic growth of nearly 50%. Add the January 2022 acquisition of STI Norland, a European maker of solar trackers, and "we nearly doubled the business in 2022."
Gross margin grew from 9.7% in 2021 to 13.5% to 14% in 2022, he added. Array expects free cash flow of $135 million to $137 million, vs. the $100 million previously projected.
The CEO sees strength in the solar industry in 2023. Hostetler says the passing of the Inflation Reduction Act (IRA) has already started new investments in solar power and believes it will add a significant amount of growth for years.
Array reports its complete fourth-quarter results on March 15.
UBS Sees The Solar Stock's Potential
At the end of last year, Array earned its way to the UBS 23 Stocks for 2023 list.
UBS sees Array's market share growing from 55% in 2021 to 65% in 2023, as its core drivetrain architecture patent runs though January 2030.
The research company sees Array benefiting from IRA credits to their suppliers, bringing down Array's input costs. Secondly, UBS sees a growing utility-scale solar market, driving orders for Array. UBS projects utility-scale solar installations to grow 64% in 2023 and 15% in 2024. Falling steel price and freight costs also should contribute to Array's positive outlook.
UBS raised its price target on ARRY stock to 30 from 29 on Friday following the preliminary 2022 numbers.
Solar Stock Rises Above Key Level
The solar stock is rising above its 50-day moving average. Shares are forming a new base with a 24.69 buy point, according to MarketSmith pattern recognition. The stock found support at its 200-day moving average as it bottomed.
Earnings Expected To Grow 143% in 2023
Third-quarter EPS grew to 18 cents from a year-ago loss of 6 cents per share. Sales soared 173% to $515 million.
Analysts forecast 2022 earnings per share of 35 cents from 4 cents in 2021, a whopping 775% increase. Expectations remain high for 2023, with an estimated EPS of 85 cents, representing a 143% increase.
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