r/shares – Array Applied sciences, Inc. (NASD: ARRY): A Photo voltaic Pureplay

Firm Description

Array Technologies went public in October 2020, elevating greater than $1 billion at a valuation of $2.8 billion (1). The corporate manufactures monitoring techniques for utility-scale photo voltaic power initiatives (2). Array Applied sciences has accomplished greater than 900 of those initiatives previously 30 years (3).

Array primarily operates in the US, producing 87% of their 2019 income within the nation. Greater than 30% of U.S. utility-scale photo voltaic technology makes use of an Array product. Its second largest market is Australia at 8% of income (4). The corporate has put in its techniques in 30 nations whole (3). Its headquarters are in Albuquerque, New Mexico (4).


Array’s main product is the DuraTrack HZ v3 tracking system. The DuraTrack platform works with the corporate’s SmarTrack software program to routinely modify photo voltaic modules in response to distinctive web site terrain and climate situations. SmarTrack is machine studying based mostly, permitting important adaptability (4). Observe that Array’s mixed DuraTrack-SmarTrack techniques is at the moment its solely product providing.

There are three important components that affect demand for photo voltaic monitoring techniques:

1. Levelized price of power (LCOE)

Corporations don’t have any incentive to buy monitoring techniques when the price of the monitoring system outweighs the worth of the extra power technology. This implies monitoring techniques are solely viable in areas with excessive electrical energy prices. Increasing the areas of viability requires reducing the price of the monitoring system.

Array Applied sciences accomplishes this in a number of methods:

  • Lower than 1 motor is in use per MW (5)

  • A single tracker block maneuvers 32 rows with 100+ modules (5)

  • Makes use of few shifting elements and the design is sort of easy (5)

  • SmarTrack requires no further sensors or {hardware} (6)

The above design selections enable Array to offer trackers that generate the very best quantity of power potential with out main monitoring prices. You will need to observe that the simplest photo voltaic tracker on an power foundation is commonly not the simplest on a price foundation. Array appears to successfully stability between effectivity and product price. In actual fact, the DuraTrack system is independently verified to realize 6.7% decrease LCOE than opponents (4).

2. Operation and Upkeep (O&M)

It will be important that photo voltaic modules using monitoring techniques have excessive uptimes so the price of the monitoring system is additional recouped. Moreover, restore prices for monitoring techniques could make their buy unappealing.

Array’s DuraTrack boasts a 99.996% uptime due to its few shifting elements (7). The DuraTrack system requires no scheduled upkeep (5). Array supplies a number of case research proving the product’s sturdiness, together with its operation within the high-corrosion atmosphere of Jordan (8).

DuraTrack’s sturdy design additionally features a totally mechanical wind-load mitigation system. It’s the solely photo voltaic tracker to make use of such an computerized system with out utilizing sensors or electrical energy (4).

3. Set up Labor and Prices

Array Applied sciences lowered set up price by means of 3 single-bolt module clamp designs. Notably, the corporate claims its RapidClamp design requires simply 11 seconds per set up. Quick set up occasions tremendously scale back the overall price of putting in the DuraTrack system (7).

Management and Possession

Ron Corio (pictured) is the founding father of Array Applied sciences and at the moment serves on the board, after being CEO from 1989 to 2018 (4). Corio is taken into account a pioneer of photo voltaic monitoring as he’s among the many first to develop such a system (20). Corio holds 10% of the corporate’s shares and is the second largest shareholder (10).

Mr. James M. Fusaro is the CEO of Array Applied sciences, serving within the position since Corio’s mid-2018 retirement (4). Beforehand, Mr. Fusaro served as President of Superior Supplies at Honeywell Worldwide Inc. (NYSE: HON). On this position, Fusaro oversaw the $3 billion Honeywell Efficiency Supplies & Expertise enterprise. He has additionally held government roles at Avnet (NASD: AVT) and Amkor Applied sciences (NASD: AMKR). These positions all contribute to Fusaro’s prolonged expertise in electronics, semiconductors, and manufacturing. He additionally has over a decade expertise as an engineer (9).

Fusaro bought 182,772 shares of ARRY in October 2020 at $22 per share for a complete price of $4,020,984 (11). In whole, Fusaro owns round 1% of the corporate (10).

Establishments maintain 78% of Array Applied sciences; the biggest holder is Constancy Investments at 15% of shares. Different holders embody AllianceBernstein, Blackrock, the Financial institution of New York Mellon, and Neuberger Berman Group at over 1% every (12). Array’s inventory fell in December 2020 after Oaktree Capital Administration bought a good portion of its place within the firm. The promoting of those shares is comprehensible as Oaktree owned a major proportion of Array by means of its subsidiary, ATI Intermediate Holdings (13).

Outlook and Technique

The outlook for the photo voltaic business may be very promising. Photo voltaic is the quickest rising type of electrical energy technology in the US. Analysts mission the photo voltaic business to develop earnings 32% yearly over the subsequent 5 years (17).

Estimations point out U.S. installations of ground-mounted photo voltaic technology capability will attain a compound annual development fee (CAGR) of 16%. Array sees a number of tailwinds for the business: regulation of fossil fuels, reducing photo voltaic power prices, rising help for clear power initiatives, and accelerating deployment of utility-scale batteries (4).

Particular to Array’s market, U.S. installations of trackers for 1+ megawatt techniques are rising at a CAGR of 35%. Array’s merchandise are actually current on greater than 1 in 4 photo voltaic modules put in within the U.S. so far (5). Over 50% of utility-scale photo voltaic initiatives use monitoring techniques in the US (14). Array Applied sciences is positioning itself to realize extra of this market share.

Array Applied sciences is executing a 3 half development technique:

  • Acquire market share within the firm’s core U.S. enterprise: Array’s order e-book elevated by 31% year-over-year from Q3 2019 to Q3 2020 (15).

  • Increase internationally: Within the final 9 months of 2020 the corporate elevated its worldwide footprint by over 50% (15).

  • Carry out bolt-on acquisitions: As of their Q3 2020 earnings name, Array is at the moment pursuing a number of acquisition targets (15).

Array’s present revenues have safety by means of the corporate’s patents on its DuraTrack system and elements. The corporate’s linked-row, rotating gear drive system additionally has patent safety till 2030. The patent protects their single-axis monitoring system that makes use of only one electrical motor to drive the rotation of a number of rows of photo voltaic modules utilizing articulated driveline joints. The patent additionally protects DuraTrack’s wind-mitigation stowing system. The corporate believes its patents pressure opponents to make use of much less environment friendly designs, sustaining Array’s aggressive benefit (4).


NEXTracker Inc. is Array’s important competitor and in addition the biggest photo voltaic monitoring firm on this planet. NEXTracker is a subsidiary of Flex Ltd. (NASD: FLEX) after its acquisition in 2014. Flex’s inventory rose considerably after Array’s IPO, indicating NEXTracker being additional priced into Flex’s valuation.

Flex doesn’t report particular person monetary information for NEXTracker in its filings. This makes it troublesome to carry out a basic comparability between the 2. Nevertheless, analyzing the distinction of their merchandise supplies worthwhile perception.

NEXTracker’s photo voltaic trackers use one motor per row of photo voltaic panels, in contrast with DuraTrack’s one motor for a number of rows. NEXTracker’s use of extra motors results in elevated price and is one cause for Array’s superior LCOE, though NEXTracker’s techniques are extra superior technically. NEXTracker is unable to modify to a single-motor system due to Array’s patents. IArray Applied sciences is at the moment in litigation regarding an ex-employee who allegedly shared commerce secrets and techniques with NEXTracker in violation of a non-compete settlement (4).

Competitively, Array’s solely actual moat is its patents which expire in 2030. The corporate does have sure product benefits over NEXTracker due to DuraTrack’s decrease price, simplicity, LCOE, and wind mitigation system. Array’s patents on these techniques will finally expire. It is usually potential that opponents mirror these options with out infringing on Array’s patents (4). Traders ought to pay attention to Array’s low/non-existent moat.


Array Applied sciences is working to lower product prices whereas drastically rising revenues and income. The corporate is already worthwhile with optimistic free money move. The desk beneath illustrates Array’s revenues, earnings, and money flows (18).

Class TTM 2019 2018
Complete Income 975,116 647,899 290,783
Gross Revenue 248,141 150,761 11,555
Working Revenue 171,402 83,409 -61,206
Web Revenue 121,046 39,745 -60,764
Normalized EBITA 196,502 110,692 -33,203
Working Money Circulation 141,016 386,073 -11,727
Free Money Circulation 139,488 384,376 -18,157

Array Applied sciences’ 2019 income was $647,899,000, rising 123% over 2018. Array has grown revenues 51% within the trailing 12 months. Margins have elevated since 2017, except for a 3% improve on account of COVID-19 provide chain disruptions (15). At present, gross margins are at simply over 25% (18).

Array holds $27.14 million in money and carries little or no debt. The corporate is just not liable to insolvency with a present ratio of 1.8 and Debt/Fairness of 0.03. Array is utilizing its low-debt standing to pursue bolt-on acquisitions and has the money pile to take action (19).

ARRY trades at ratios of 51.33 P/E, 5.40 P/S, and a couple of.09 PEG (18). These valuation metrics are inline or barely larger than the business averages of 59.32 P/E, 4.53 P/S, and 1.85 PEG (17). Essentially, the valuation seems excessive however Array’s excessive development in income and earnings makes it appear extra affordable. The corporate’s valuation is inline with different corporations within the photo voltaic business and rising quicker.

The imply value goal for ARRY is $51.05 which interprets to a ~30% upside. The bottom value goal is $37 from Morgan Stanley (NYSE: MS) and Credit score Suisse (NYSE: CS). The best value goal is $60 from Piper Sandler (NYSE: PIPR) (21).


There are numerous dangers to contemplate earlier than investing in Array Applied sciences. These dangers embody however will not be restricted to:

  • Array Applied sciences is reliant on the success of a single product

  • Array doesn’t have a major (if any) moat

  • Array has a excessive valuation on account of its development, which can cease or gradual

  • ARRY is an especially risky inventory

  • The corporate releases its fourth quarter and full-year 2020 earnings report on March ninth, 2021

  • Main shareholders promoting might trigger the inventory to fall

  • Low critiques on Glassdoor; worker morale could also be low following administration modifications (22)

  • Rivals, like NEXTracker, might take market share from Array


I don’t present funding recommendation of any sort and I’m not a certified licensed funding advisor. I’m an novice investor. All data discovered right here, together with any concepts, opinions, views, predictions, forecasts, commentaries, strategies, or inventory picks, expressed or implied herein, are for informational, leisure or academic functions solely and shouldn’t be construed as private funding recommendation. Whereas the data offered is believed to be correct, it could embody errors or inaccuracies.

On the time of writing, I personal shares in Array Applied sciences (NASD: ARRY) with a mean price foundation of $36.27 per share. The inventory is buying and selling at roughly $37.61 as of this report’s launch on February 2nd, 2021.


(1) [Albuquerque Business First – Array Technologies IPO raises over $1 billion](

(2) Array Technologies – About Us

(3) Array Technologies – Home

(4) SEC – Array Technologies S-1

(5) Array Technologies – Research Analyst Presentation

(6) Array Technologies – SmarTrack

(7) Array Technologies – DuraTrack

(8) Array Technologies – Dead Sea Case Study

(9) Linked In – Jim Fusaro

(10) Yahoo Finance – Is Array Technologies, Inc. Popular Amongst Insiders?

(11) SEC – Array Technologies FORM 4

(12) Yahoo Finance – Array Technologies Holders

(13) Investor Place – Should Oaktree Capital Sell the Rest of Its Array Technologies Stock?

(14) EIA – More than half of utility-scale solar photovoltaic systems track the sun through the day

(15) Motley Fool – Array Technologies, Inc (ARRY) Q3 2020 Earnings Call Transcript

(16) Barrons – Flex Stock Soars on Speculation It Could Sell or Spin Solar-Tracking Unit

(17) Finviz – Technology Industries

(18) Yahoo Finance – ARRY Financials

(19) SEC – Array Technologies 10-Q

(20) Solar Powered World – Innovators and Influencers: Ron Corio, a pioneer of solar tracker reliability

(21) Finviz – ARRY Array Technologies, Inc. Stock Quote

(22) Glassdoor – Array Technologies Reviews

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