Shoals Technologies Shares Plunge 22% as Tariffs Hit Margins Despite Revenue Growth

Shoals Technologies reported a robust 38.6% year-over-year increase in fourth-quarter sales, demonstrating strong top-line momentum. However, the company's gross margin contracted by 600 basis points to 31.6%, primarily due to the adverse impact of trade tariffs and rising material costs. This profitability squeeze, combined with one-time litigation expenses, effectively overshadowed the revenue beat. Furthermore, management's Q1 Adjusted EBITDA guidance fell significantly short of market expectations, sparking concerns over sustained margin pressure. Consequently, the stock price plummeted by 22% as investors reacted to the weakened outlook for the renewable energy provider. The sharp decline highlights the growing sensitivity of the solar sector to supply chain costs and trade policy.