FTC Solar, Inc. (NASDAQ: FTCI)

Sector: Technology Industry: Solar CIK: 0001828161
Market Cap 126.70 Mn
P/B -9.23
P/E -2.29
P/S 1.58
ROIC (Qtr) -362.53
Div Yield % 0.00
Rev 1y % (Qtr) 156.81
Total Debt (Qtr) 17.23 Mn
Debt/Equity (Qtr) -1.25
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About

FTC Solar, Inc. (FTCI), a prominent player in the solar energy industry, specializes in the design, manufacturing, and sale of solar trackers and software solutions for utility-scale projects. Since its inception in 2017, the company has expanded its reach to various regions worldwide, including the United States, Asia, Europe, the Middle East, North Africa, South Africa, and Australia. The company's primary revenue streams come from offering solar trackers and software solutions to project developers, solar asset owners, and engineering, procurement,...

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Investment thesis

Bull case

  • Strong tangible asset base of 104.21M provides 6.05x coverage of total debt 17.23M, indicating robust asset backing and low credit risk.
  • Tangible assets of 104.21M provide exceptional 23.64x coverage of deferred revenue 4.41M, showing strong service capability backing.
  • Retained earnings of (390.93M) represent substantial 28.47x of equity (13.73M), indicating strong internal capital generation.
  • R&D investment of 4.75M represents healthy 1.08x of deferred revenue 4.41M, indicating strong future innovation pipeline.
  • Strong tangible asset base of 104.21M provides 11.62x coverage of acquisition spending 8.97M, enabling strategic growth.

Bear case

  • Operating cash flow of (42.11M) barely covers its investment activities of 7.89M, with a coverage ratio of -5.34, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of (42.11M) provides insufficient coverage of deferred revenue obligations of 4.41M, which is -9.55x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (42.11M) shows concerning coverage of stock compensation expenses of 3.51M, with a -11.99 ratio indicating potential earnings quality issues.
  • High receivables of 49.19M relative to inventory of 7.66M (6.43 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of (42.11M) provides minimal -156.53x coverage of tax expenses of 269000, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Solar
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 FSLR First Solar, Inc. 24.22 Bn 17.30 4.80 0.55 Bn
2 NXT Nextpower Inc. 18.09 Bn 30.50 5.02 0.00 Bn
3 ENPH Enphase Energy, Inc. 6.00 Bn 34.84 4.07 1.20 Bn
4 RUN Sunrun Inc. 4.28 Bn -1.73 1.85 14.69 Bn
5 SEDG Solaredge Technologies, Inc. 2.16 Bn -3.68 2.12 0.40 Bn
6 SHLS Shoals Technologies Group, Inc. 1.87 Bn 56.32 4.32 0.17 Bn
7 ARRY Array Technologies, Inc. 1.73 Bn -18.82 1.30 0.68 Bn
8 JKS JinkoSolar Holding Co., Ltd. 1.37 Bn -2.86 0.14 6.93 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.21 1.41
EV to Cash from Ops. EV/CFO -3.19 3.45
EV to Debt EV to Debt 7.81 6.34
EV to EBIT EV/EBIT -2.61 22.16
EV to EBITDA EV/EBITDA -3.21 5.58
EV to Free Cash Flow [EV/FCF] EV/FCF -3.11 9.74
EV to Market Cap EV to Market Cap 1.06 2.40
EV to Revenue EV/Rev 1.68 312.86
Price to Book Value [P/B] P/B -9.23 0.12
Price to Earnings [P/E] P/E -2.29 -3.59
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -9.53
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.00
Dividend per Basic Share Div per Share (Qtr) 0.00 0.00
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.00
Interest Coverage Int. cover (Qtr) -14.16 -54.67
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 37.05 -54.29
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 195.20 50.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -10.04 3.75
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 15.51 -309.44
EBIT Growth (1y) % EBIT 1y % (Qtr) -9.01 -42.85
EBT Growth (1y) % EBT 1y % (Qtr) -15.47 -48.74
EPS Growth (1y) % EPS 1y % (Qtr) -7.77 -74.61
FCF Growth (1y) % FCF 1y % (Qtr) -66.14 4.39
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -19.14 701.13
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.72 0.65
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 0.42 0.39
Current Ratio Curr Ratio (Qtr) 1.66 1.43
Debt to Equity Ratio Debt/Equity (Qtr) -1.25 0.31
Interest Cover Ratio Int Coverage (Qtr) -14.16 -54.67
Times Interest Earned Times Interest Earned (Qtr) -14.16 -54.67
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -62.70 -907.38
EBIT Margin % EBIT Margin % (Qtr) -64.37 -994.26
EBT Margin % EBT Margin % (Qtr) -68.92 -1,508.47
Gross Margin % Gross Margin % (Qtr) -12.00 10.82
Net Profit Margin % Net Margin % (Qtr) -69.30 -1,462.08