SolarEdge Technologies (SEDG) on Tuesday reported a narrower-than-expected loss for the fourth quarter but fell short of estimates for sales. SolarEdge stock sank as the company also offered a lighter sales forecast than anticipated.
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The manufacturer of solar inverters on Tuesday posted an adjusted loss of 92 cents per share on sales of $316 million for the December quarter. On average, analysts projected that SolarEdge would post an adjusted loss of $1.34Â per share on sales of $323 million, according to FactSet.
SolarEdge’s sales guidance also came in much lighter than anticipated. For the current quarter, SolarEdge guided for revenue of $175 million to $215 million. Heading into the report, analysts were projecting the company would tally $374 million in sales for the March quarter, according to FactSet.
On the stock market today, SolarEdge stock was down more than 13% at 73.40 in recent after-hours action.
Slump Continues For SolarEdge
SolarEdge has been among the solar stocks hit hard over the past year by rising interest rates and weakened demand. Shares lost 67% in 2023. Late last year, SolarEdge was dropped from the S&P 500 as part of a portfolio rebalancing. In January, SolarEdge cut 900 jobs, or 16% of its workforce. For the same period a year earlier, SolarEdge posted adjusted earnings of $2.86 per share on sales of $891 million.
“The first half of 2023 included record installations and expectations for continued growth, with a shift in the second half of the year to a weaker market due to higher interest rates and lower power prices, which resulted in an inventory buildup that slowed our shipments,” SolarEdge Chief Executive Zvi Lando said in a news release. “Nevertheless, we believe we are well positioned for the next growth cycle in our industry due to our expanding product portfolio as well as the operational and cost reduction measures we have taken.”
SolarEdge is certainly not alone in its struggles. The Energy-Solar group tracked by IBD MarketSmith ranked as the worst overall performer among 197 industry categories for much of last year. The group is down a collective 7% so far on the year.
SolarEdge Stock: Technical Ratings
Prior to earnings, SolarEdge stock fell just under 1% to 84.42 in Tuesday trading. Not including Tuesday’s after-hours trading, SEDG shares have lost about 8% this year and 71% in the past 12 months.
Coming into the report, SolarEdge stock had a meager IBD Composite Rating of 27 out of a best-possible 99, according to IBD Stock Checkup. The score combines five separate proprietary ratings into one rating to identify the strongest performing stocks.
Further, SolarEdge’s IBD Relative Strength Rating was 7 out of 99. The rating compares a stock’s price movement over the last 52 weeks with that of others in IBD’s database. The best stocks typically score above 90.
On a more positive note, SolarEdge stock had an Accumulation/Distribution Rating of B- heading into earnings. That score indicates slightly more institutions are buying than selling shares.
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