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SolarEdge (SEDG) to Report Q2 Earnings: What's in the Cards?

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SolarEdge Technologies, Inc. (SEDG - Free Report) is set to report second-quarter 2020 results on Aug 3, after market close. In the last reported quarter, the company delivered a negative earnings surprise of 14.17%.

However, the bottom line outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 5.93%.

Let’s see how things have shaped up prior to this announcement.

Factors at Play

Courtesy of the novel coronavirus outbreak, SolarEdge experienced a significant decline in installation rates across the United States and parts of Europe. Considering the fact that the pandemic took a worse turn worldwide from the beginning of the second quarter, we expect such low installation rates to have prevailed in the soon-to-be-reported quarter.

However, in the latter part of the second quarter, the company was supposed to start shipping its new commercial inverter with added safety features and higher energy density. This is likely to have contributed to its quarterly revenues.

The Zacks Consensus Estimate for second-quarter revenues is pegged at $321.6 million, indicating a 1.1% dip from the figure reported in the year-ago quarter.

As stringent lockdowns were implemented from end of March across countries, shipments of products by SolarEdge might have been hampered. This indicates that the finished products are lying idle in the warehouse or storage facilities of the company, which in turn must have shot up its quarterly storage cost or idle facility cost. Consequently, we remain skeptical about earnings growth at SolarEdge this time around.

The Zacks Consensus Estimate for second-quarter earnings is pegged at 69 cents per share, suggesting deterioration of 26.6% from the year-earlier quarter figure of 94 cents.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for SolarEdge this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

SolarEdge has an Earnings ESP of -7.25% and a Zacks Rank #3.  You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Upcoming Solar Releases

Enphase Energy (ENPH - Free Report) has a Zacks Rank #2 and is set to report second-quarter 2020 results on Aug 4, after market close. You can see the complete list of today’s Zacks #1 Rank stocks here.

First Solar (FSLR - Free Report) has a Zacks Rank #3 and is set to release second-quarter 2020 results on Aug 6.

Vivint Solar (VSLR - Free Report) carries a Zacks Rank #3 and is scheduled to post second-quarter 2020 results on Aug 5.

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