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ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. Shoals Technologies Group's annualized return on invested capital (ROIC %) for the quarter that ended in Jun. 2026 was 6.39%.
As of today (2026-08-29), Shoals Technologies Group's WACC % is 13.45%. Shoals Technologies Group's ROIC % is 5.32% (calculated using TTM income statement data).
Shoals Technologies Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Shoals Technologies Group (NAS:SHLS) ROIC % Explanation
ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.
There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.
Why is ROIC % important?
Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Shoals Technologies Group's WACC % is 13.45%. Shoals Technologies Group's ROIC % is 5.32% (calculated using TTM income statement data).
Shoals Technologies Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Solar subindustry, Shoals Technologies Group's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Shoals Technologies Group ROIC % vs Semiconductors Industry
For the Semiconductors industry and Technology sector, Shoals Technologies Group's ROIC % distribution charts can be found below:
* The bar in red indicates where Shoals Technologies Group's ROIC % falls into.
Note:
The Operating Income data used here is four times the quarterly (Jun. 2026) data.
The tax rate is limited to between 0% and 100%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Shoals Technologies Group (SHLS) has a ROIC % of 6.39% as of Jun. 2026. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Shoals Technologies Group and its competitors.
Is Shoals Technologies Group's ROIC % too high?
Shoals Technologies Group's current ROIC % is 6.39%. The Semiconductors industry median ROIC % is 4.54. Shoals Technologies Group's value of 6.39% is 40.9% above this industry median. Overall, Shoals Technologies Group has a GF Score™ of 89/100 and is considered Modestly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Shoals Technologies Group's ROIC % compare to CSIQ and ARRY?
Shoals Technologies Group's ROIC % of 6.39% can be compared against companies in the Semiconductors industry. The industry median ROIC % is 4.54. Shoals Technologies Group's value of 6.39% is 40.9% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROIC % for a Semiconductors company?
The median ROIC % among Semiconductors companies is 4.54, based on 1,016 companies in the industry. Companies in the top quartile (top 25%) have a ROIC % significantly above this median, while those in the bottom quartile fall well below. However, ROIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Shoals Technologies Group's current ROIC % of 6.39% is 40.9% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROIC % mean?
A high ROIC % can signal that a stock is expensive relative to its fundamentals. Return on invested capital is the ratio of current-period net income to average two-period invested capital. View historical data on Shoals Technologies Group and its competitors. For the Semiconductors industry, the median ROIC % is 4.54 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Shoals Technologies Group's current ROIC % is 6.39%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Shoals Technologies Group stock overvalued right now?
Based on GuruFocus' analysis, Shoals Technologies Group (SHLS) is currently considered Modestly Undervalued. The stock's GF Value™ is $9.97, compared to a current price of $7.14 — trading 28.4% below its estimated fair value. The current ROIC % is 6.39% and 40.9% above the Semiconductors industry median of 4.54. Shoals Technologies Group's overall GF Score™ is 89/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROIC % calculated?
ROIC % is calculated from a company's financial statements. For Shoals Technologies Group (SHLS), the current ROIC % is 6.39% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Shoals Technologies Group (SHLS) Overvalued in 2026?
Based on GuruFocus' analysis, Shoals Technologies Group stock appears to be undervalued.
The current stock price of $7.14 is trading 28.4% below its estimated GF Value™ of $9.97.
GuruFocus considers Shoals Technologies Group to be Modestly Undervalued.
Key valuation signals for SHLS:
ROIC %: 6.39%
GF Value™: $9.97 vs. price of $7.14 (28.4% below fair value)
Industry Position: 40.9% above the Semiconductors median
No single metric tells the full story. See the SHLS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Shoals Technologies Group is a provider of electrical balance of system solutions for solar energy projects, primarily in the United States. EBOS encompasses components that are necessary to carry electric current produced by solar panels to an inverter. The products are sold principally to engineering, procurement, and construction firms that build solar energy projects.
89GF Score
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