SolarEdge Stock Plummets to $67.10 in 2025 After Disappointing Q4 Earnings and Sluggish Sales Forecast

Essential Insights

• SolarEdge Technologies (SEDG) shares nosedived over 20% in early trading after releasing Q4 results below market expectations and issuing a conservative revenue forecast for Q1 2024.
• The company faces inventory backlogs expected to persist through the end of 2024, driven by softened U.S. solar market demand amid high interest rates.
• Technical analysis suggests a potential triple bottom formation near $64, a pivotal support level that could signal a reversal if maintained.

SolarEdge Technologies, Inc. Overview

Shares of SolarEdge Technologies (NASDAQ: SEDG) dropped sharply by more than 20% before the market opened on Wednesday, following the release of quarterly earnings that fell short of analysts' projections. The company also provided a cautious outlook for the first quarter of 2024, reflecting ongoing challenges in the residential solar market and an accumulation of excess inventory.

In Q4 2023, SolarEdge reported adjusted earnings of $0.92 per share on revenues of $316 million, missing Wall Street's estimates of $1.17 per share and $354 million in sales. Revenue declined by over 60% year-over-year, underscoring the prolonged downturn affecting the solar industry. For Q1 2024, the company anticipates revenue between $175 million and $215 million, significantly trailing the $406 million forecasted by analysts.

The inventory surplus, a consequence of diminished demand in the latter half of 2023 due to elevated interest rates, is not expected to resolve until late 2024. CEO Zvi Lando highlighted these market headwinds during the earnings call, noting that the European residential solar sector may stabilize in Q1, while a U.S. recovery hinges on a reduction in interest rates.

In response to the challenging environment, SolarEdge recently implemented workforce reductions totaling 16%, closed its Mexican manufacturing facility, and scaled back production capacity in China to control costs.

Since falling below $90 in mid-October 2023, SEDG shares have traded sideways with slightly increased volume compared to the previous year. Investors should closely monitor the $64 support level established in November and February; maintaining this floor could form a triple bottom pattern, potentially indicating the start of an upward trend.

As of 7:55 a.m. ET, SolarEdge shares were trading at $67.10, reflecting a roughly 70% decline over the past 12 months.

Disclaimer: The information provided is for educational purposes only and does not constitute investment advice. Readers should conduct their own research or consult a financial advisor before making investment decisions.

Note: The author holds no positions in SolarEdge Technologies at the time of writing.

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