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SolarEdge (SEDG) Up 9.1% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for SolarEdge Technologies (SEDG - Free Report) . Shares have added about 9.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is SolarEdge due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
SolarEdge Q3 Earnings Miss Estimates, Revenues Fall Y/Y
SolarEdge Technologies reported third-quarter 2023 adjusted loss of 55 cents per share, which missed the Zacks Consensus Estimate of earnings of 68 cents. The bottom line also deteriorated from the prior-year quarter’s reported earnings of 91 cents per share.
Barring one-time adjustments, the company recorded a GAAP loss of $1.08 per share against earnings of 43 cents in the year-ago period.
Revenues
The company’s quarterly revenues of $725.3 million missed the Zacks Consensus Estimate of $766.7 million by 5.4%. The top line also declined 13% from the year-ago quarter’s figure of $836.7 million.
Revenues from the solar segment totaled $676.4 million, down 14% from $788.6 million registered in the prior-year period.
Operational Highlights
SolarEdge shipped a total of 3.8 gigawatts of inverters and 121 megawatt-hours of batteries in the reported quarter.
The adjusted gross margin contracted 650 basis points to 20.8% from the prior-year figure of 27.3%.
Adjusted operating expenses went up 18% year over year to $128 million.
The adjusted operating income totaled $23.1 million, down 81% from the year-ago quarter’s figure of $120.2 million.
Financial Performance
SolarEdge had $551.1 million in cash and cash equivalents as of Sep 30, 2023, compared with $783.1 million as of Dec 31, 2022.
The cash outflow from operating activities amounted to $40.2 million compared with $80 million in the year-ago period.
Total long-term liabilities were $1,287.5 million as of Sep 30, 2023, compared with $1,199.9 million as of Dec 31, 2022.
Q4 Guidance
SEDG expects revenues in the range of $300-$350 million for the fourth quarter of 2023. The Zacks Consensus Estimate for the same is pegged at $1.05 billion, higher than the midpoint of the guided range.
Revenues from the solar segment are projected in the range of $275-$320 million for the same time frame.
While the company’s adjusted gross margin is estimated in the range of 5-8%, the same for the solar segment is anticipated in the band of 7-10%.
SEDG expects adjusted operating expenses in the $126-$130 million range.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -596.13% due to these changes.
VGM Scores
At this time, SolarEdge has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, 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. It's no surprise SolarEdge has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
SolarEdge is part of the Zacks Solar industry. Over the past month, First Solar (FSLR - Free Report) , a stock from the same industry, has gained 6.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
First Solar reported revenues of $801.09 million in the last reported quarter, representing a year-over-year change of +27.4%. EPS of $2.50 for the same period compares with -$0.46 a year ago.
First Solar is expected to post earnings of $3.31 per share for the current quarter, representing a year-over-year change of +4828.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -5.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for First Solar. Also, the stock has a VGM Score of F.
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SolarEdge (SEDG) Up 9.1% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for SolarEdge Technologies (SEDG - Free Report) . Shares have added about 9.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is SolarEdge due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
SolarEdge Q3 Earnings Miss Estimates, Revenues Fall Y/Y
SolarEdge Technologies reported third-quarter 2023 adjusted loss of 55 cents per share, which missed the Zacks Consensus Estimate of earnings of 68 cents. The bottom line also deteriorated from the prior-year quarter’s reported earnings of 91 cents per share.
Barring one-time adjustments, the company recorded a GAAP loss of $1.08 per share against earnings of 43 cents in the year-ago period.
Revenues
The company’s quarterly revenues of $725.3 million missed the Zacks Consensus Estimate of $766.7 million by 5.4%. The top line also declined 13% from the year-ago quarter’s figure of $836.7 million.
Revenues from the solar segment totaled $676.4 million, down 14% from $788.6 million registered in the prior-year period.
Operational Highlights
SolarEdge shipped a total of 3.8 gigawatts of inverters and 121 megawatt-hours of batteries in the reported quarter.
The adjusted gross margin contracted 650 basis points to 20.8% from the prior-year figure of 27.3%.
Adjusted operating expenses went up 18% year over year to $128 million.
The adjusted operating income totaled $23.1 million, down 81% from the year-ago quarter’s figure of $120.2 million.
Financial Performance
SolarEdge had $551.1 million in cash and cash equivalents as of Sep 30, 2023, compared with $783.1 million as of Dec 31, 2022.
The cash outflow from operating activities amounted to $40.2 million compared with $80 million in the year-ago period.
Total long-term liabilities were $1,287.5 million as of Sep 30, 2023, compared with $1,199.9 million as of Dec 31, 2022.
Q4 Guidance
SEDG expects revenues in the range of $300-$350 million for the fourth quarter of 2023. The Zacks Consensus Estimate for the same is pegged at $1.05 billion, higher than the midpoint of the guided range.
Revenues from the solar segment are projected in the range of $275-$320 million for the same time frame.
While the company’s adjusted gross margin is estimated in the range of 5-8%, the same for the solar segment is anticipated in the band of 7-10%.
SEDG expects adjusted operating expenses in the $126-$130 million range.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -596.13% due to these changes.
VGM Scores
At this time, SolarEdge has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Following the exact same course, 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. It's no surprise SolarEdge has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
SolarEdge is part of the Zacks Solar industry. Over the past month, First Solar (FSLR - Free Report) , a stock from the same industry, has gained 6.9%. The company reported its results for the quarter ended September 2023 more than a month ago.
First Solar reported revenues of $801.09 million in the last reported quarter, representing a year-over-year change of +27.4%. EPS of $2.50 for the same period compares with -$0.46 a year ago.
First Solar is expected to post earnings of $3.31 per share for the current quarter, representing a year-over-year change of +4828.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -5.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for First Solar. Also, the stock has a VGM Score of F.