Reviewing Shoals Technologies Group (NASDAQ:SHLS) and Enovix (NASDAQ:ENVX)

Shoals Technologies Group (NASDAQ:SHLS) and Enovix (NASDAQ:ENVX) are both small-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shoals Technologies Group	$475.33 million	2.74	$33.57 million	$0.19	40.68
Enovix	$31.82 million	17.59	-$156.74 million	($0.81)	-3.15

Shoals Technologies Group has higher revenue and earnings than Enovix. Enovix 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 and Institutional Ownership

50.9% of Enovix shares are held by institutional investors. 0.8% of Shoals Technologies Group shares are held by company insiders. Comparatively, 12.7% of Enovix shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Shoals Technologies Group and Enovix, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shoals Technologies Group	0	7	11	0	2.61
Enovix	2	3	6	1	2.50

Shoals Technologies Group presently has a consensus price target of $10.80, indicating a potential upside of 39.72%. Enovix has a consensus price target of $10.77, indicating a potential upside of 322.46%. Given Enovix’s higher possible upside, analysts plainly believe Enovix is more favorable than Shoals Technologies Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Shoals Technologies Group	5.41%	10.07%	6.38%
Enovix	-473.89%	-64.50%	-19.31%

Risk and Volatility

Shoals Technologies Group has a beta of 1.85, suggesting that its stock price is 85% more volatile than the S&P 500. Comparatively, Enovix has a beta of 2.49, suggesting that its stock price is 149% more volatile than the S&P 500.

Summary

Shoals Technologies Group beats Enovix on 9 of the 15 factors compared between the two stocks.

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.

About Enovix

Enovix Corporation designs develops and manufactures silicon-anode lithium-ion batteries. It serves wearables and IoT, smartphone, laptops and tablets, industrial and medical, and electric vehicles industries. The company was founded in 2007 and is headquartered in Fremont, California.