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Solar Stocks to Watch for Earnings on Nov 1: RUN, SEDG & SPWR
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The third-quarter 2023 earnings season for solar stocks has started on a disappointing note, with this industry’s S&P 500-member, Enphase Energy (ENPH - Free Report) , reporting an in-line earnings and missing on estimates for revenues. A cohort of other industry players like Sunrun (RUN - Free Report) , SolarEdge Technologies (SEDG - Free Report) and SunPower (SPWR - Free Report) are set to release their quarterly results tomorrow.
Factors that Influenced Solar Stocks
Thanks to the recovering supply-chain constraints in the post-COVID era, demand in the solar industry started to surge in the recent past, thereby bolstering the installation rates of the market. However, America’s high-interest rate environment has led to a surge in financing costs for panel installations for the past few months. As a result, a gradual demand slowdown in the U.S. solar industry started in the second quarter, which on being amplified in the third quarter, is likely to have resulted in deterioration of solar product shipments.
Evidently, Enphase Energy observed a solid 35.5% decline in its solar battery shipment and a 10% decrease in its microinverters shipment. These, in turn, caused the company to suffer a 13% deterioration in its third-quarter revenues. With ENPH being one of the prominent solar players in the nation, the July-September quarter results of the remaining industry players may reflect a similar downward trend in their shipment count.
Another factor that might have hurt the demand in the U.S. solar industry is a key reduction in incentives for rooftop installations in California, which happens to be the nation’s largest market. This apart, lowering utility rates in Europe has hit the solar demand there, which, in turn, may have hurt international shipments for U.S. solar companies, with Europe being a prominent contributor to their revenues.
Nevertheless, considering the fact that a handful of U.S. solar stocks have ramped up their manufacturing facilities across the nation in the past few months and joined forces with contract manufacturers to enhance their production rate, there’s some hope for their third-quarter results. Such increased production rates are also likely to have provided them with production cost efficiency.
This, along with increasing average selling price of solar products, might have contributed favorably to the overall top and bottom-line performance of the Oil-Energy sector, which houses all solar stocks.
Q3 Projections
The Oil-Energy sector’s earnings are expected to have declined 35.5% from the prior-year quarter’s reported figure, on a revenue deterioration of 19.7%.
For more details on quarterly releases, you can go through the latest Earnings Preview.
Solar Stocks to Watch
Let's take a look at three solar companies that are scheduled to report third-quarter 2023 earnings on Nov 1, and find out how things might have shaped up prior to the announcements.
Sunrun: In the last reported quarter, the company witnessed an earnings surprise of 173.53%. Sunrun’s exclusive partnership with PG&E Corp., called Peak Power Rewards, is likely to have boosted customer growth, thereby bolstering the company’s revenues in the third quarter.
However, a likely reduction in solar energy capacity installation due to an expected decline in California order volumes might have unfavorably impacted RUN’s top line.
RUN currently has an Earnings ESP of +1,308.3% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
SolarEdge: In the last reported quarter, the company delivered an earnings surprise of 2.75%. Macroeconomic factors in the United States and the new net metering 3.0 regime in California are likely to have dampened SEDG’s revenues in the third quarter.
Sales from the newly acquired Hark Systems, characterized by very high gross margins, are likely to have contributed to the overall margin performance in the third quarter, thus boosting the overall bottom line. However, a weak top line and higher operating expenses might have dampened the company’s overall bottom line in the quarter to be reported.
SunPower: In the last reported quarter, the company delivered a negative earnings surprise of 333.33%. SunPower has a four-quarter average negative earnings surprise of 98.73%.
The consensus estimate for third-quarter sales is pegged at $430.1 million, indicating a decline of 8.5% from the year-ago quarter’s level. The bottom-line estimate for the third quarter is pinned at a loss of a penny per share, implying a deterioration from the prior-year quarter’s reported earnings of 13 cents.
SPWR currently has an Earnings ESP of +15.63% and a Zacks Rank #5.
Image: Bigstock
Solar Stocks to Watch for Earnings on Nov 1: RUN, SEDG & SPWR
The third-quarter 2023 earnings season for solar stocks has started on a disappointing note, with this industry’s S&P 500-member, Enphase Energy (ENPH - Free Report) , reporting an in-line earnings and missing on estimates for revenues. A cohort of other industry players like Sunrun (RUN - Free Report) , SolarEdge Technologies (SEDG - Free Report) and SunPower (SPWR - Free Report) are set to release their quarterly results tomorrow.
Factors that Influenced Solar Stocks
Thanks to the recovering supply-chain constraints in the post-COVID era, demand in the solar industry started to surge in the recent past, thereby bolstering the installation rates of the market. However, America’s high-interest rate environment has led to a surge in financing costs for panel installations for the past few months. As a result, a gradual demand slowdown in the U.S. solar industry started in the second quarter, which on being amplified in the third quarter, is likely to have resulted in deterioration of solar product shipments.
Evidently, Enphase Energy observed a solid 35.5% decline in its solar battery shipment and a 10% decrease in its microinverters shipment. These, in turn, caused the company to suffer a 13% deterioration in its third-quarter revenues. With ENPH being one of the prominent solar players in the nation, the July-September quarter results of the remaining industry players may reflect a similar downward trend in their shipment count.
Another factor that might have hurt the demand in the U.S. solar industry is a key reduction in incentives for rooftop installations in California, which happens to be the nation’s largest market. This apart, lowering utility rates in Europe has hit the solar demand there, which, in turn, may have hurt international shipments for U.S. solar companies, with Europe being a prominent contributor to their revenues.
Nevertheless, considering the fact that a handful of U.S. solar stocks have ramped up their manufacturing facilities across the nation in the past few months and joined forces with contract manufacturers to enhance their production rate, there’s some hope for their third-quarter results. Such increased production rates are also likely to have provided them with production cost efficiency.
This, along with increasing average selling price of solar products, might have contributed favorably to the overall top and bottom-line performance of the Oil-Energy sector, which houses all solar stocks.
Q3 Projections
The Oil-Energy sector’s earnings are expected to have declined 35.5% from the prior-year quarter’s reported figure, on a revenue deterioration of 19.7%.
For more details on quarterly releases, you can go through the latest Earnings Preview.
Solar Stocks to Watch
Let's take a look at three solar companies that are scheduled to report third-quarter 2023 earnings on Nov 1, and find out how things might have shaped up prior to the announcements.
Sunrun: In the last reported quarter, the company witnessed an earnings surprise of 173.53%. Sunrun’s exclusive partnership with PG&E Corp., called Peak Power Rewards, is likely to have boosted customer growth, thereby bolstering the company’s revenues in the third quarter.
However, a likely reduction in solar energy capacity installation due to an expected decline in California order volumes might have unfavorably impacted RUN’s top line.
Higher interest costs and inflationary pressures must have weighed on the company’s earnings in the third quarter (read more: Sunrun to Report Q3 Earnings: What's in the Cards?).
According to the Zacks model, 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. You can see the complete list of today’s Zacks #1 Rank stocks here.
RUN currently has an Earnings ESP of +1,308.3% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Sunrun Inc. Price and EPS Surprise
Sunrun Inc. price-eps-surprise | Sunrun Inc. Quote
SolarEdge: In the last reported quarter, the company delivered an earnings surprise of 2.75%. Macroeconomic factors in the United States and the new net metering 3.0 regime in California are likely to have dampened SEDG’s revenues in the third quarter.
Sales from the newly acquired Hark Systems, characterized by very high gross margins, are likely to have contributed to the overall margin performance in the third quarter, thus boosting the overall bottom line. However, a weak top line and higher operating expenses might have dampened the company’s overall bottom line in the quarter to be reported.
SEDG currently has an Earnings ESP of 0.00% and a Zacks Rank #5 (Strong Sell) (read more: SolarEdge Set to Post Q3 Earnings: What's in Store?).
SolarEdge Technologies, Inc. Price and EPS Surprise
SolarEdge Technologies, Inc. price-eps-surprise | SolarEdge Technologies, Inc. Quote
SunPower: In the last reported quarter, the company delivered a negative earnings surprise of 333.33%. SunPower has a four-quarter average negative earnings surprise of 98.73%.
The consensus estimate for third-quarter sales is pegged at $430.1 million, indicating a decline of 8.5% from the year-ago quarter’s level. The bottom-line estimate for the third quarter is pinned at a loss of a penny per share, implying a deterioration from the prior-year quarter’s reported earnings of 13 cents.
SPWR currently has an Earnings ESP of +15.63% and a Zacks Rank #5.
SunPower Corporation Price and EPS Surprise
SunPower Corporation price-eps-surprise | SunPower Corporation Quote
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.