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What Awaits SolarEdge Technologies (SEDG) in Q4 Earnings?

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SolarEdge Technologies, Inc. (SEDG - Free Report) is set to report fourth-quarter and 2019 results on Feb 19, after market close.

In the last reported quarter, the company delivered a positive earnings surprise of 1.68%. Moreover, the bottom line outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. The four-quarter beat is 1.05%, on average.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Growing commercial and residential solar installations in the United States have been boosting demand for SolarEdge Technologies’ inverters and power optimizers. Considering such a steady growth pattern, the company earlier announced its expectations of witnessing a robust seasonal growth in the United States, backed by strong commercial business opportunities, during the fourth quarter. This, in turn, might have boosted its quarterly top line.

SolarEdge Technologies is also expected to have witnessed an increased level of air shipments in the fourth quarter, led by the rising global demand for its products. Notably, such a rise in shipments is expected to have driven the company’s quarterly revenues significantly in the fourth quarter.

In line with such developments, the Zacks Consensus Estimate for fourth-quarter revenues is pegged at $415 million, indicating a 57.6% surge from the figure reported in the year-ago quarter.

However, increased air shipments might negatively impact the gross margin.

Nevertheless, SolarEdge Technologies has been making significant efforts to reduce actual support costs, primarily by deploying tighter control support operations. Moreover, during the third-quarter earnings call, the company announced its expectations of witnessing lower expenses for the fourth quarter owing to the decreasing trend in the company's failure rate.

Considering these developments, the Zacks Consensus Estimate for fourth-quarter earnings is pegged at $1.30 per share, suggesting a massive improvement of 106.4% from the year-earlier quarter’s 63 cents.

SolarEdge Technologies, Inc. Price and EPS Surprise

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for SolarEdge Technologies this season. 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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

SolarEdge Technologies has an Earnings ESP of 0.00% and a Zacks Rank #3.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Upcoming Solar Releases

Enphase Energy (ENPH - Free Report) has a Zacks Rank #2 and is set to report fourth-quarter and 2019 results on Feb 18, after market close.

First Solar (FSLR - Free Report) has a Zacks Rank #3 and is set to release fourth-quarter results on Feb 20.

Vivint Solar carries a Zacks Rank #3 and is expected to post fourth-quarter 2019 results soon.

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