The residential solar market is recovering, but SolarEdge isn't seeing the benefit. SolarEdge (SEDG 0.98%) was once one of the hottest stocks in the solar industry. But the company has run into problems as the market collapses and power optimizers lose market share to microinverters. In this video, Travis Hoium explains why the company is on thin ice. *Stock prices used were end-of-day prices of Aug. 12, 2024. The video was published on Aug. 12, 2024. ...

SolarEdge Technologies, Inc. (SEDG) reported a second-quarter 2024 adjusted loss of $1.79 per share, wider than the Zacks Consensus Estimate of a loss of $1.60. The bottom line also deteriorated from the prior-year quarter's reported earnings of $2.62 per share. Barring one-time adjustments, the company incurred a GAAP loss of $2.31 per share against GAAP earnings of $2.03 per share recorded in the year-ago period. The year-over-year deterioration in the bottom line can be attributed to significantly lower ...

Investment Rating - The report maintains a **Neutral** rating for SolarEdge Technologies (SEDG US) with a target price of $100 [40] Core Views - SolarEdge's Q3 2024 revenue guidance of $260-290 million is significantly below the market consensus of $356 million, indicating a weaker-than-expected performance [1][2] - The company expects US channel inventory to normalize by the end of Q3 2024, while European inventory normalization is delayed until early 2025 [1][2] - SolarEdge anticipates a return to higher revenue levels by Q2 2025, with quarterly revenue expected to reach $550 million and a gross margin of 23% [2] Financial Performance - Q2 2024 revenue was $265.4 million, in line with consensus, driven by the solar segment, which contributed $241.1 million [2] - Non-GAAP gross margin for Q2 2024 was 0.2%, slightly better than the consensus of -1.1% [2] - The company reported a non-GAAP net loss of $101 million in Q2 2024, worse than the consensus loss of $91 million [1][2] - SolarEdge shipped 0.9GW of inverters in Q2 2024, down 8% quarter-over-quarter, while optimizer shipments increased by 100% to 2 million units [2] Inventory and Cash Flow - Inventory levels stood at $1.5 billion in Q2 2024, down from $1.55 billion in Q1 2024, with expectations to reduce to $1.3 billion by the end of 2024 [3] - The company expects cash burn of $70-90 million in Q3 2024, with positive cash flow anticipated by the first half of 2025 [3] Stock Repurchase and Impairment - SolarEdge repurchased 247,000 shares in Q2 2024, valued at $17 million, as part of a $300 million share repurchase program [2] - The company plans to conduct an impairment test on its assets in Q3 2024 [2] Market and Operational Challenges - European residential solar demand remained weak in Q2 2024, particularly in the Netherlands, with no acceleration expected in the commercial and industrial markets in the second half of the year [2] - The company faces challenges in managing inventory levels and achieving revenue growth amid market headwinds [1][2]

Financial Performance - Revenues for Q2 2024 were $265.4 million, a decrease of 73.3% compared to $991.3 million in Q2 2023[135]. - Net loss for Q2 2024 was $130.8 million, compared to net income of $119.5 million in Q2 2023[135]. - Revenues decreased by $725.9 million, or 73.2%, in the three months ended June 30, 2024, compared to the same period in 2023, primarily due to lower sales of inverters and power optimizers[149]. - Revenues decreased by $1,465.4 million, or 75.7%, in the six months ended June 30, 2024, compared to the same period in 2023, primarily due to lower sales of inverters and power optimizers[153]. - Solar revenues decreased by $706.1 million, or 74.5%, in the three months ended June 30, 2024, compared to the same period in 2023, primarily due to lower sales of inverters and power optimizers[182]. - Energy Storage revenues increased by $2.3 million, or 12.0%, in the three months ended June 30, 2024, compared to the same period in 2023[186]. - All other segments revenues decreased by $22.1 million, or 89.9%, in the three months ended June 30, 2024, primarily due to the discontinuation of the LCV e-Mobility activity[188]. Product Shipment and Demand - Approximately 128.2 million power optimizers, 5.7 million inverters, and 276.2 thousand batteries for PV applications were shipped as of June 30, 2024[134]. - The company experienced a slowdown in demand for its Solar segment products starting in Q3 2023, attributed to high inventory levels and slower installation rates[136]. - Inverters shipped in Q2 2024 totaled 65,772, down from 334,635 in Q2 2023, representing a decline of 80.3%[144]. - Power optimizers shipped in Q2 2024 were 2,001,614, a decrease of 63.8% from 5,531,373 in Q2 2023[144]. - The number of power optimizers sold decreased by approximately 3.5 million units, or 63.6%, from approximately 5.5 million units in the three months ended June 30, 2023, to approximately 2.0 million units in the same period in 2024[150]. - The number of inverters sold decreased by approximately 538.1 thousand units, or 80.8%, from approximately 665.8 thousand units in the six months ended June 30, 2023, to approximately 127.7 thousand units in the same period in 2024[154]. Cost and Expenses - Gross loss for Q2 2024 was 4.1%, compared to a gross margin of 32.0% in Q2 2023[135]. - Cost of revenues decreased by $397.6 million, or 59.0%, in the three months ended June 30, 2024, compared to the same period in 2023, mainly due to a decrease in the volume of products sold[157]. - Total operating expenses for the three months ended June 30, 2024, were $149.2 million, compared to $166.9 million in the same period in 2023[157]. - Research and development costs decreased by $17.3 million or 19.9% in the three months ended June 30, 2024, compared to the same period in 2023[162]. - Sales and marketing expenses decreased by $4.2 million or 9.6% in the three months ended June 30, 2024, compared to the same period in 2023[166]. - General and administrative expenses increased by $2.8 million or 7.8% in the three months ended June 30, 2024, primarily due to an increase in expenses related to doubtful debt of $7.4 million[166]. Cash Flow and Financing - Net cash used in operating activities was $44.8 million in the three months ended June 30, 2024, compared to $88.7 million in the same period in 2023[191]. - Cash provided by investing activities was $243.2 million in the six months ended June 30, 2024, compared to cash used of $144.5 million in the same period in 2023, driven by increased proceeds from marketable securities[194]. - The company has cash and cash equivalents of $259.5 million as of June 30, 2024, excluding $550.6 million in marketable securities[191]. - The company announced a share repurchase program authorizing the repurchase of up to $300 million of common stock, effective until December 31, 2024[197]. - During the six months ended June 30, 2024, the company repurchased 753,364 shares at an average cost of $66.79 per share for a total of $50.3 million[198]. - The company sold $300 million of 2.25% convertible senior notes due 2029, with net proceeds of approximately $293.2 million after fees[199]. - The company repurchased $285 million principal amount of outstanding 0.000% convertible notes due 2025, resulting in a gain of $15.5 million recorded under other income[199]. Tax and Financial Metrics - Tax benefits were $12.2 million in the three months ended June 30, 2024, compared to income taxes of $34.2 million in the same period in 2023[172]. - Financial expense, net was $0.9 million in the three months ended June 30, 2024, compared to financial income of $3.4 million in the same period in 2023, primarily due to an increase of $9.2 million in expenses related to credit loss[169]. - Financial expenses, net was $7.9 million in the six months ended June 30, 2024, compared to financial income of $27.1 million in the same period in 2023, primarily due to an increase of $11.4 million in expenses related to credit loss[169]. Market and Customer Insights - Revenues from outside of the U.S. comprised 63.4% of total revenues in the three months ended June 30, 2024, down from 80.3% in the same period in 2023[150]. - Approximately 48.33% of revenues for the six months ended June 30, 2024, were earned in non-U.S. dollar currencies, primarily the Euro[202]. - A hypothetical 10% change in foreign currency exchange rates between the Euro and the U.S. dollar would impact net income by $23.3 million for the six months ended June 30, 2024[202]. - As of June 30, 2024, two major customers accounted for approximately 25.3% of consolidated trade receivables, down from 46.8% as of December 31, 2023[204]. - For the three months ended June 30, 2024, one major customer accounted for approximately 11.3% of total revenues, compared to 29.6% for the same period in 2023[204]. Risks and Challenges - The company has reduced manufacturing capacity outside the U.S. and discontinued production in Mexico due to decreased demand[134]. - Approximately 10% of employees in Israel were called to active reserve duty due to the ongoing war, with 75% having returned to work[137]. - The company is exposed to commodity price risk from fluctuating prices of raw materials such as Copper, Lithium, Nickel, and Cobalt, without hedging arrangements in place[205].

Company Performance - SolarEdge Technologies' stock closed at $27.01, reflecting a +0.75% change from the previous trading day's closing, outperforming the S&P 500's daily loss of 0.5% [1] - The company is expected to report earnings of -$1.56 per share on August 7, 2024, indicating a year-over-year decline of 159.54% [2] - The latest consensus estimate predicts revenue of $258.19 million, representing a 73.95% decrease compared to the same quarter of the previous year [2] - For the full year, analysts expect earnings of -$4.66 per share and revenue of $1.32 billion, marking changes of -213.11% and -55.62% respectively from last year [7] Analyst Estimates - Recent changes to analyst estimates for SolarEdge Technologies reflect shifting short-term business patterns, with positive revisions indicating analysts' confidence in the company's performance [3] - The Zacks Consensus EPS estimate has decreased by 1.88% over the last 30 days, and SolarEdge Technologies currently holds a Zacks Rank of 4 (Sell) [4] Industry Context - The solar industry, part of the Oils-Energy sector, has a Zacks Industry Rank of 168, placing it within the bottom 34% of over 250 industries [9] - Over the past month, shares of SolarEdge Technologies gained 11.85%, outperforming the Oils-Energy sector's loss of 10.92% and the S&P 500's gain of 0.1% [6]

SolarEdge Technologies (NASDAQ:SEDG) stock is down 90% from where it stood one year ago. Not only does it mean the business has fallen on hard times but there are likely few investors left after the rout. Still, if the dominoes fall into place as forecast and the bullish scenario plays out, don't hang on. Instead, view it as a chance to deploy your money else into more profitable ventures. SolarEdge's solar segment revenue started collapsing in the third quarter of 2023 and only worsened since. With first-q ...

SolarEdge issued downside guidance for Q2 2024 revenues of $250 million to $280 million versus $306.88 million consensus estimates. The company has been in the process of inventory clearing during typical seasonality. The spring season historically accelerates installations, and the company expects channel inventory to continue to decline as revenues improve. SolarEdge is focused on its suite of new products, which will be released in Q2 2024 and will position it for the next industry growth cycle. SolarEdg ...

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In this video, Motley Fool contributors Jason Hall and Tyler Crowe break down the latest news for SolarEdge (SEDG 9.26%) and discuss whether investors should consider buying shares now. The residential solar market is still very, very weak, but SolarEdge is poised to boom when it recovers. *Stock prices used were from the afternoon of June 25, 2024. The video was published on July 8, 2024. ...

Key Takeaways Bank of America upgraded SolarEdge Technologies, saying the solar power equipment maker will be profitable next year. BofA Securities added that the recent slide in SolarEdge's share price was based on an "unlikely worstcase scenario." However, the bank cut the price target, noting that the whole solar power industry continues to struggle. BofA Securities raised its rating to "neutral" from "underperform," although it lowered the price target to $29 from $44. BofA Expects SolarEdge To Return T ...