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SolarEdge Technologies to Report Q4 Earnings: What's in the Cards?

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SolarEdge Technologies, Inc. (SEDG - Free Report) is scheduled to release fourth-quarter 2024 results on Feb. 19, before market open.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

In the last reported quarter, the company delivered a negative earnings surprise of 889.03%. SolarEdge Technologies has a negative four-quarter average earnings surprise of 220.94%.

Let’s discuss the factors that are likely to reflect in the upcoming quarterly results.

Factors to Note Ahead of SEDG’s Q4 Results

SolarEdge Technologies has been witnessing a significant slowdown in demand for its products for the past couple of quarters, with its distributors facing persistent financial challenges. Such a poor demand environment is likely to have prevailed in the fourth quarter as well, particularly in Europe, which is expected to have hurt the year-over-year sell-through of SEDG’s optimizers, inverters and batteries. This is expected to have hurt the company’s overall top-line performance.

Notably, weak market conditions in Europe, along with regulatory uncertainties and high inventory levels in the distribution channels, are likely to have adversely impacted SEDG’s revenues from the European region.

To this end, the company expects continued inventory clearing from its distribution channels, lower seasonal installations and decreased shipments to have adversely impacted its overall performance.

On the cost front, bad debt expense recorded as part of SEDG’s asset impairment analysis is likely to have put downward pressure on its fourth-quarter earnings despite its efforts to reduce operating expenses. This, along with weak sales expectations, is likely to have hurt SEDG’s earnings performance.

SEDG’s Q4 Expectations

The Zacks Consensus Estimate for sales is pegged at $186.3 million, which implies a decrease of 41.1% from the year-ago number.

The consensus estimate for earnings is pegged at a loss of $1.58 per share, which implies a significant deterioration from the year-ago reported loss of 92 cents per share.

What the Zacks Model Unveils

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

Earnings ESP: SEDG has an Earnings ESP of -12.50%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: SolarEdge Technologies currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are three companies from the same sector that have the right combination of elements to post an earnings beat this reporting cycle.

Berry Corporation (BRY - Free Report) is set to report fourth-quarter 2024 earnings on March 12, 2025. It has an Earnings ESP of +8.33% and a Zacks Rank of 2.

The Zacks Consensus Estimate for BRY’s fourth-quarter earnings is pegged at 12 cents per share. The consensus estimate for its sales is pegged at $155 million.

Cheniere Energy Partners (CQP - Free Report) is expected to report fourth-quarter 2024 earnings soon. It has an Earnings ESP of +0.31% and a Zacks Rank of 3.

The Zacks Consensus Estimate for CQP’s earnings is pegged at $1.07 per share, indicating year-over-year growth of 11.5%. The consensus estimate for its sales is pegged at $2.37 billion.

Clearway Energy (CWEN - Free Report) is set to report fourth-quarter 2024 earnings on Feb. 24. It has an Earnings ESP of +164.00% and a Zacks Rank of 2.

The Zacks Consensus Estimate for CWEN’s earnings is pegged at 13 cents per share. The consensus estimate for its sales is pegged at $308 million, indicating year-over-year growth of 23.7%.

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