Investors don't think a leadership transition is enough to help SolarEdge. To say investors in solar energy company SolarEdge Technologies (SEDG -1.32%) have had a bad year is an understatement. The stock's sharp decline continued this week. As of Friday midday trading, SolarEdge shares were down by over 15% just this week, according to data provided by S&P Global Market Intelligence. That drop has contributed to a massive 74% decline SolarEdge shares this year. That more than erased all the prior gains the ...

The Property of F i I th The Property. New pr l ri H 0 - 1 romasct Note: I have covered SolarEdge Technologies or "SolarEdge" (NASDAQ:SEDG) previously, so investors should view this as an update to my earlier article on the company. SolarEdge Technologies Q2 Earnings & Q3 Guidance: Earlier this month, SolarEdge Technologies reported Q2 2024 results largely in line with the disclosures made in conjunction with the company's $3,000 million convertible notes offering in June: | --- | --- | --- | --- | --- | -- ...

Company Overview - SolarEdge Technologies Inc (NASDAQ:SEDG) is experiencing a decline in stock price, down 5.8% to $27.17 after CEO Zvi Lando announced his resignation, with Ronen Faier, the former CFO, stepping in as interim CEO [1] - The stock has rebounded from a low of $19.81 on August 8, which was its lowest level since summer 2016, and has gained 14.9% on Friday, but is still down 57.3% over the last six months and 83.1% over the past 12 months [2] Options Trading Activity - Options traders are showing increased activity, with 6,180 calls and 3,069 puts traded today, which is four times the average intraday volume, indicating heightened interest [3] - The 10-day put/call volume ratio for SolarEdge ranks higher than 96% of readings from the last 12 months, suggesting a predominantly bullish sentiment among options traders [4]

Core Viewpoint - SolarEdge Technologies is positioned to benefit from government support and a growing demand for solar energy, despite facing supply chain disruptions and competition, leading to a recommendation of Strong Buy [2][10]. Government Support - The US government has introduced subsidies favoring domestic solar panel production, providing SolarEdge a competitive edge over Chinese imports, which dominate 80% of the global market [3][4]. - Tariff rates have been implemented to protect local manufacturers, contributing to SolarEdge's positive revenue performance in Q2 2024 despite reduced shipments [4]. Financial Performance - SolarEdge reported a revenue increase from $204.2 million in Q1 2024 to $265.2 million in Q2 2024, indicating recovery from previous operational income losses [6][10]. - The non-GAAP net profit margin improved from -6.5% in Q1 2024 to 0.2% in Q2 2024, reflecting a positive shift in earnings [10]. Market Demand and Growth - The solar energy sector is expected to grow significantly, with forecasts indicating a rise in solar power generation from 163 billion KWh in 2023 to 286 billion KWh by 2025, driven by increasing electrification and decarbonization commitments [7][8]. - Currently, only 4% of US power generation comes from solar, suggesting substantial growth potential as clean energy becomes more prioritized [8]. Competitive Landscape - SolarEdge holds a 40% market share in the global inverter market, closely competing with Enphase, which has a 48% share [9]. - SolarEdge's inverters are noted for their high efficiency (99.25%) compared to Enphase's IQ 7 series (97%), and they offer compatibility with multiple high-voltage batteries, enhancing their appeal [9]. Future Projections - The PS ratio for SolarEdge is expected to rise from slightly below 1x to between 1.7x and 2.5x, aligning more closely with competitors as the solar sector grows [10]. - With a consensus revenue forecast of around $1.1 billion for the financial year, the target price range is projected to be between $31 and $45, indicating over 20% upside potential [10].

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].

The most recent trading session ended with SolarEdge Technologies (SEDG) standing at $27.01, reflecting a +0.75% shift from the previouse trading day's closing. The stock's change was more than the S&P 500's daily loss of 0.5%. At the same time, the Dow added 0.5%, and the tech-heavy Nasdaq lost 1.28%. The investment community will be closely monitoring the performance of SolarEdge Technologies in its forthcoming earnings report. The company is scheduled to release its earnings on August 7, 2024. In that re ...

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 ...