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SolarEdge (SEDG) Set to Post Q1 Earnings: What's in Store?

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SolarEdge Technologies, Inc. (SEDG - Free Report) is slated to report first-quarter 2022 results on May 2 after the closing bell.

In the last reported quarter, SolarEdge delivered a negative earnings surprise of 14.73%. Its bottom line outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 0.42%.

Factors to Note

Higher battery sales and increased residential inverter sales, particularly higher-priced Energy Hub inverter sales in North America, buoyed by the ramped up solar demand, are anticipated to have bolstered the top-line performance of SEDGin the first quarter. Apart from North America, the strong growth momentum in installations in Southeast Asia and the Middle East is also likely to have continued to benefit the top line of the company in the first quarter.

Also, the strong sales growth of EV chargers and smart water heaters is expected to have boosted revenues of the company in the soon-to-be-reported quarter.

Further, SolarEdge, per its earlier announcement, must have increased its manufacturing capabilities in Vietnam for the delivery of products to all regions, followed by the additional manufacturing growth in Mexico to supply commercial products to the U.S. market. Such enhanced production is likely to have bolstered its first-quartertop line.

The Zacks Consensus Estimate for first-quarter revenues is pegged at $634.7 million, suggesting growth of 56.5% from the year-ago quarter’s reported number.

From the cost perspective, the company has been experiencing higher logistics costs and tariffs and some component and raw material price increases. These, along with costs related to the fast-manufacturing capacity expansion, are expected to have partially dampened SolarEdge’s earnings in the soon-to-be-reported quarter. However, the price increase across its various product lines must have outweighed the negative cost impact and aidedits margins, thereby boosting earnings in the to-be-reported quarter.

Also, the shifting of the contract manufacturing facility to Mexico may have assisted the company in reducing its shipping costs and tariffs. This, in turn, may have benefited the bottom line of the company in the first quarter.

The Zacks Consensus Estimate for first-quarter earningsis pegged at $1.32 per share, indicating an improvement of 34.7% from the prior-yearreported figure.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for SEDG this time. The combination of a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.

SolarEdge has an Earnings ESP of +4.75% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here

Another Stock to Consider

Here is one more solar player you may want to consider as it has the right combination of elements to post an earnings beat this season:

SunPower (SPWR - Free Report) currently has an Earnings ESP of +26.31% and a Zacks Rank #3. The Zacks Consensus Estimate for its first-quarterearnings, pegged at 3 cents per share, implies a year-over-year decline of 40% from the prior-year reported figure.

The Zacks Consensus Estimate for SunPower’s first-quartersales suggests year-over-year growth of 9.2% from the prior-year reported figure. SPWR has a four-quarter earnings surprise of 8.33%.

Upcoming Releases

Here are two solar players yet to release their first-quarter numbers:

First Solar (FSLR - Free Report) is scheduled to report its earnings on Apr 28, 2022. The Zacks Consensus Estimate for its first-quarter sales, pegged at $567.4 million, implies a year-over-year decline of 29.4%.

First Solarboasts a long-term earnings growth rate of 10.2%. FSLR has a four-quarter earnings surprise of 26.49%.

Sunrun( (RUN - Free Report) is slated to report its first-quarter results on May 4, 2022. The Zacks Consensus Estimate for Sunrun’s first-quarterearnings suggests a year-over-year decline of 27.3% from the prior-year reported figure.

The Zacks Consensus Estimate for RUN’s first-quartersales implies year-over-year growth of 14.4% from the prior-year reported figure.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.