Array Technologies is a solar hardware company that makes the mechanical systems used to move solar panels at large-scale utility solar farms. It generated $1.28 billion in revenue last year, though it reported a net loss due to a one-time accounting write-down. The business currently maintains a $2 billion orderbook, signaling a large pipeline of projects that have been signed but not yet built.
The investment thesis on Array Technologies is that it will return to growth as the backlog of utility-scale solar projects finally breaks ground and the company benefits from new tax credits for American-made hardware. While interest rates and project delays slowed down revenue last year, the core demand for single-axis trackers remains the standard for maximizing solar energy production.
We view the stock as a classic cyclical opportunity where the current low price reflects temporary project delays rather than a broken business model. If management can execute on the $2 billion backlog while keeping margins steady, the stock should recover significantly. One risk to watch is whether larger rival Nextracker continues to take market share during this period of slower industry activity.
Array Technologies' stock price dropped significantly after going public and has stayed mostly stuck since. It is down about 60% over the last few years as high interest rates delayed many large solar projects. The company is now hoping to recover as these projects finally start construction and government tax credits help its business.
What does it do?
Array Technologies is a maturing business that earns money by selling single-axis solar tracking systems and optimization software to utility-scale solar developers. When a utility company builds a massive solar farm, they buy Array’s mechanical trackers to tilt the panels throughout the day, which can increase energy production by 20% to 30% compared to stationary panels. The company makes money by selling the physical steel structures, gearboxes, and controllers, while also charging for its SmarTrack software that uses sensors and weather data to fine-tune panel positioning.
Where does revenue come from?
Almost all revenue comes from the sale of tracker systems and related hardware for large-scale solar projects. While the physical tracker sales dominate the mix, the company also generates recurring-style revenue from its software and services that help maintain the systems over their 30-year lifespan. Revenue is primarily concentrated in the United States, but the 2022 acquisition of STI Norland expanded its footprint into Europe, Latin America, and Australia.
Revenue by Geography
Who are its customers?
Array Technologies serves large utility-scale solar developers, independent power producers, and construction firms. The company maintains a healthy orderbook of $2 billion, which represents the total value of signed contracts waiting for delivery. Because these projects are massive—often covering hundreds or thousands of acres—a single customer order can represent hundreds of millions of dollars in revenue. In the most recent year, the company’s high-probability pipeline remained robust even as project timelines shifted due to interest rate environments.
What gives it staying power?
Array’s staying power comes from its massive scale and a decades-long track record of system reliability in harsh environments. Solar developers are risk-averse and prefer established vendors with a proven "bankable" history, making it very difficult for new, smaller hardware companies to win large utility contracts.
Where is it headed?
The company is shifting its focus toward "domestic content" and terrain-flexible systems like OmniTrack. By manufacturing more components in the U.S., Array helps its customers qualify for extra tax credits under the Inflation Reduction Act, making its trackers more attractive than foreign imports. OmniTrack allows developers to build solar farms on hilly or uneven land, opening up new sites that were previously too expensive to develop.
Verdict: Revenue is currently in a cyclical slump after a record 2023. Revenue fell from $1.58 billion in 2023 to $1.28 billion in 2024 as higher interest rates and regulatory uncertainty delayed project groundbreakings. Despite this, the company has managed to keep adjusted gross margins in the 30% to 35% range, showing that it still has some pricing power.
Verdict: Cash generation is healthy and helps offset the accounting losses. While the company reported a net loss in 2025 due to a $162 million non-cash write-down of its European business, it generated $80 million in free cash flow. This reveals that the underlying business is still throwing off cash even when the official profit numbers look messy.
Verdict: The balance sheet carries significant debt but remains manageable. Array holds $1.2 billion in market cap against a debt-to-equity ratio of 2.85x, which reflects the heavy capital needed to manufacture and store large steel components. The primary risk is that high interest rates increase the cost of this debt while simultaneously slowing down the customers who buy the products.
Array Technologies is a financially resilient business facing a temporary demand slowdown, where strong cash flow and a $2 billion backlog provide a floor against recent earnings volatility.
Gross margins have remained impressively high at 33.8% despite lower overall sales volume. This shows that management is doing a good job of controlling costs and selling more American-made components that command a higher price.
The conversion of the $2 billion orderbook into actual revenue is the primary trigger for the stock. If the orderbook fails to turn into sales by late 2026, it would suggest that projects are being canceled rather than just delayed.
The solar tracker market is a $5 billion global industry growing at 15% annually as utility companies shift toward solar for its lower cost of energy. This market is on track to exceed $9 billion by 2028 as trackers become standard for any project trying to maximize power output. It is a generally healthy industry, though it suffers from cyclical swings tied to steel prices and interest rates. Array Technologies is one of the two dominant players in this market, giving it a massive lead over dozens of smaller, unproven hardware makers.
The market is a rational duopoly in the United States between Array and Nextracker, though competition from private players is rising internationally. Barriers to entry are high because utility companies require decades of reliability data before they will commit hundreds of millions of dollars to a supplier. Pricing power is currently stable but under threat if project delays force competitors to cut prices to win volume.
Nextracker is the most dangerous threat, as it often wins on its more advanced software and its ability to handle complex terrain. GameChange Solar competes aggressively on price, which can compress margins during periods of slow demand. FTC Solar is a niche player that lacks the scale to compete on cost but remains a factor in specialized projects. Nextracker has recently gained share at the high end of the market, putting pressure on Array to innovate with its new OmniTrack system.
Array Technologies is currently under pressure as it works to maintain its share against a very strong and better-capitalized leader in Nextracker.
Array’s primary protection comes from the switching costs associated with its SmarTrack software and its bankable track record. Once a developer builds a site with Array trackers, they are unlikely to use a different software platform for management, creating a long-term service relationship. The $2 billion orderbook is the best evidence of this moat, proving that customers are willing to commit to Array years before a project even begins.
The financial numbers tell a mixed story: gross margins of 34% suggest some pricing power, but a low 4.6% ROIC indicates that the company is not yet earning high returns on the money it spends. This combination suggests a business that has successfully defended its territory but hasn't yet turned that defense into high profitability. The current numbers are consistent with a narrow moat that depends heavily on maintaining scale.
The moat is currently stable, with the single most important signal being whether the company can successfully defend its U.S. market share as domestic manufacturing rules change.
Missed revenue targets in 2024 as projects were delayed.
Used cash to pay down debt and invest in US manufacturing.
CEO owns stock but stake is not a dominant percentage.
Capital Allocation Track Record
Kevin Hostetler has shown strong strategic judgment by pivoting the company toward U.S. manufacturing to capture new tax credits, though the actual results have been lumpy. Management is trustworthy, but they are operating in an industry where project timelines are often out of their control, making it hard to judge them solely on quarterly beats and misses. The acquisition of STI Norland was a smart move to diversify away from the U.S. market, even if the timing led to a recent non-cash accounting loss.
The business is highly dependent on Hostetler’s ability to navigate the complex world of federal solar incentives, though there is a credible bench of executives in finance and legal. Governance risk is low, with no dual-class structure or major board concerns. The primary key-person risk is the loss of strategic vision during this transition period where the company is trying to prove it can win on technology rather than just being a provider of steel.
We expect revenue to grow from $1.5B in FY2026 to $2.0B in FY2031 (~6% CAGR), with EPS growing from $0.73 to $1.61 (~17% CAGR). Growth is driven by the global shift toward utility-scale solar farms where single-axis trackers are the preferred technology for maximizing energy yield. Operating margins expand as the company increases the mix of its high-margin SmarTrack optimization software and achieves better pricing on raw steel components. EPS Operating margin expected to reach ~18% by FY2031.
Capturing the 10% domestic content bonus for U.S. solar projects. If Array provides 100% American trackers, developers can earn a massive tax credit that makes Array the only logical choice.
OmniTrack opens up thousands of acres of hilly, uneven land. Expanding into terrain-flexible trackers allows Array to win projects on land that was previously unusable for solar.
SmarTrack software becomes the standard for utility-scale optimization. Increasing software adoption creates recurring revenue that carries much higher margins than the physical steel trackers.
Higher interest rates keep solar projects in the backlog permanently. If rates stay high, many of the projects in the $2 billion orderbook may never get financed or built.
Nextracker uses its market lead to squeeze Array out of major accounts. If the industry leader uses its scale to drop prices, Array could lose its most profitable customers.
Federal solar tax credits are reduced or eliminated after the next election. Much of the current investment thesis relies on government incentives that could be changed by a new administration.
Below is our estimate of current and future fair value, with detailed reasoning and assumptions. Fair value is a judgment, not a fact, and other analysts will likely land on different numbers. Use it as one data point in your research, and apply your own discretion in any investing decision.
We use a Forward P/E approach based on fiscal 2027 earnings to determine the fair value. This framework fits Array because the company is currently emerging from a period of volatile earnings; focusing on a recovery year (FY2027) captures the true earning power of the record backlog better than using trailing figures or near-term transition quarters.
Next year's EPS of $0.90 multiplied by a 14.5x multiple gives a per-share fair value of $13. Our chosen 14.5x multiple sits at the conservative end of the solar equipment peer range, aligning with First Solar (14.3x) rather than the premium multiple commanded by Nextracker (29.6x). This positioning accounts for Array's higher debt-to-equity ratio of 2.8x while still rewarding the company for its record $2.4 billion orderbook. The $0.90 EPS basis matches the deterministic projection for fiscal 2027 exactly.
A 5-year Discounted Cash Flow (DCF) cross-check yields a fair value of $18, suggesting our P/E-based headline is conservative. The $18 DCF value (sourced from the report's projection engine) accounts for the full 5-year cash flow ramp and a 15x terminal multiple, whereas our $13 headline fair value focuses strictly on the 12-month forward recovery. The 38% difference between the two indicates that while the stock is a bargain on next year's earnings, its long-term value is even higher if management can successfully sustain the projected 20% earnings growth rate through 2030.
We assume the $2.4 billion orderbook converts to revenue at an average rate of $400 million per quarter through fiscal 2027. This pace is supported by management's guidance for a 40:60 revenue split between the first and second halves of 2026 and the recent surge in awarded orders from international markets like Turkey and Colombia.
We assume adjusted EBITDA margins reach 15.5% as domestic manufacturing incentives take full effect. The transition toward U.S.-sourced components allows Array to capture significant tax credits (under the 45X provision), which should provide a structural margin floor that pure-play international competitors cannot easily replicate.
We assume the company successfully maintains its "Narrow Moat" through its terrain-flexible tracker technology. New products like OmniTrack and DuraTrack D2S are essential for defending market share against larger rivals like Nextracker, particularly in challenging geographies where fixed-tilt systems were previously the only option.
The biggest risk is a slowdown in utility-scale solar project starts due to sustained high capital costs or regulatory delays. This would stall the conversion of the $2.4 billion record orderbook, potentially compressing the forward multiple from 15x to 10x and knocking roughly $4.50 off the fair value. Watch the "book-to-bill" ratio for the first signal of a demand slowdown; anything below 1.0x suggests the backlog is being depleted faster than it is being replaced.
Bear case ($8): Book-to-bill ratio drops below 1.0x for two consecutive quarters, indicating a shrinking pipeline; or Adjusted gross margins fail to reach 25% due to persistent supply chain costs or international pricing wars.
Bull case ($20): International revenue expands to over 25% of the mix while maintaining 30%+ adjusted gross margins; or Software and services attach rates double, shifting the business toward higher-multiple recurring revenue.
Clearthesis wrote this report from 37 sources, including SEC filings, industry research, and recent news.
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© 2026 Clearthesis.ai · Report generated on June 23, 2026
This is an AI-generated analysis for informational purposes only and does not constitute financial advice. Data and analysis may not reflect recent developments if viewed significantly after the generation date. Always conduct your own due diligence before making any investment decisions.
The market is leaning bullish because Array Technologies is primed to capture massive demand from a two billion dollar backlog of pending solar projects. The rollout of the new DuraTrack D2S tracker and domestic tax credits provide a clear path for the company to turn its large orderbook into reliable, recurring profit growth.
Skeptics think that Array Technologies will struggle to sustain profitability if project delays persist despite the current order pipeline. The company reported a net loss recently due to accounting issues, and doubters worry that shifting project timelines and operational costs will prevent the business from hitting its growth targets.