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SolarEdge (SEDG) Down 6.6% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for SolarEdge Technologies (SEDG - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is SolarEdge due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
SolarEdge reported second-quarter adjusted earnings of 95 cents per share. The bottom line declined by 25.8% from the prior-year quarter’s earnings of $1.28 per share.
The Zacks Consensus Estimate for the second quarter was pegged at 86 cents per share.
Barring one-time adjustments, the company posted GAAP earnings of 26 cents per share compared with 82 cents in the year-ago quarter.
Revenues
SolarEdge’s revenues of $727.8 million in the second quarter surpassed the Zacks Consensus Estimate of $726 million by almost a cent. The top line surged 52% from the year-ago quarter’s $480.1 million.
Revenues from the solar segment were $687.6 million, up 59% from $431.5 million in the prior-year quarter.
Operational Highlights
SolarEdge shipped a total of 2.52 gigawatts (GW) of inverters in the reported quarter.
The adjusted gross margin contracted by 720 basis points from the prior-year gross margin of 33.9% to 26.7%.
Adjusted operating expenses went up 35% year over year to $109.6 million.
The adjusted operating income in the quarter totaled $84.7 million, up 4% from the year-ago quarter’s $81.3 million.
Financial Performance
SolarEdge had $745.5 million of cash and cash equivalents as of Jun 30, 2022, up from $530.1 million as of Dec 31, 2021.
The cash outflow from operating activities amounted to $85.6 million during the six months ended Jun 30, 2022 against the cash inflow from operating activities of $62.8 million in the year-ago period.
Total long-term liabilities were $1,133.1 million as of Jun 30, 2022 compared with $1,065.7 million as of Dec 31, 2021.
Q3 Guidance
In the third quarter of 2022, SEDG expects revenues in the range of $810-$840 million. The Zacks Consensus Estimate for the same is pegged at $816.4 million, lower than the midpoint of the guided range.
Revenues from the solar segment in the second quarter are projected in the range of $765-$795 million.
While the company’s adjusted gross margin is estimated at 26-29%, the gross margin in the solar segment is anticipated at 27-30%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -12.41% due to these changes.
VGM Scores
At this time, SolarEdge has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, SolarEdge has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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SolarEdge (SEDG) Down 6.6% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for SolarEdge Technologies (SEDG - Free Report) . Shares have lost about 6.6% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is SolarEdge due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
SolarEdge Q2 Earnings Beat Estimates, Revenues Rise
SolarEdge reported second-quarter adjusted earnings of 95 cents per share. The bottom line declined by 25.8% from the prior-year quarter’s earnings of $1.28 per share.
The Zacks Consensus Estimate for the second quarter was pegged at 86 cents per share.
Barring one-time adjustments, the company posted GAAP earnings of 26 cents per share compared with 82 cents in the year-ago quarter.
Revenues
SolarEdge’s revenues of $727.8 million in the second quarter surpassed the Zacks Consensus Estimate of $726 million by almost a cent. The top line surged 52% from the year-ago quarter’s $480.1 million.
Revenues from the solar segment were $687.6 million, up 59% from $431.5 million in the prior-year quarter.
Operational Highlights
SolarEdge shipped a total of 2.52 gigawatts (GW) of inverters in the reported quarter.
The adjusted gross margin contracted by 720 basis points from the prior-year gross margin of 33.9% to 26.7%.
Adjusted operating expenses went up 35% year over year to $109.6 million.
The adjusted operating income in the quarter totaled $84.7 million, up 4% from the year-ago quarter’s $81.3 million.
Financial Performance
SolarEdge had $745.5 million of cash and cash equivalents as of Jun 30, 2022, up from $530.1 million as of Dec 31, 2021.
The cash outflow from operating activities amounted to $85.6 million during the six months ended Jun 30, 2022 against the cash inflow from operating activities of $62.8 million in the year-ago period.
Total long-term liabilities were $1,133.1 million as of Jun 30, 2022 compared with $1,065.7 million as of Dec 31, 2021.
Q3 Guidance
In the third quarter of 2022, SEDG expects revenues in the range of $810-$840 million. The Zacks Consensus Estimate for the same is pegged at $816.4 million, lower than the midpoint of the guided range.
Revenues from the solar segment in the second quarter are projected in the range of $765-$795 million.
While the company’s adjusted gross margin is estimated at 26-29%, the gross margin in the solar segment is anticipated at 27-30%.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -12.41% due to these changes.
VGM Scores
At this time, SolarEdge has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, SolarEdge has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.