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SolarEdge (SEDG) to Report Q1 Earnings: What's in the Cards?
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SolarEdge Technologies, Inc. (SEDG - Free Report) is scheduled to release its first-quarter 2024 results on May 8 after market close. In the last reported quarter, the company delivered an earnings surprise of 37.41%.
However, SolarEdge has a negative four-quarter average earnings surprise of 23.57%. Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.
Factors at Play
Since the third quarter of 2023, SolarEdge started to witness slowing market demand for its products as its distributors began to experience financial challenges. Expecting the company to have faced a similar dismal demand environment in the first quarter as well, shipment volumes of SEDG can be expected to be lower than the prior-year quarter’s level, thereby adversely impacting its top-line performance.
SolarEdge Technologies, Inc. Price and EPS Surprise
Region-wise, unfavorable market dynamics in Europe associated with high interest rates and regulatory issues might have impacted SEDG’s revenues from the European region in the first quarter. In the United States, the continuous slowdown in installations in California due to the rollover of net energy metering (NEM) 2.0. and continued slow growth in the uptake of NEM 3.0 is also likely to have plagued SEDG’s revenues from the U.S. residential market. Nevertheless, favorable revenue contributions can be expected from the U.S. commercial market as well as the solar markets of Australia, Taiwan and Thailand.
In the first quarter of 2024, the company undertook significant cost reduction measures, including a reduction of 16% of its workforce. This might have reduced its operating expenses to some extent.
However, significant restructuring expenses associated with contract manufacturer charges and equipment retirement costs, in addition to expenses in relation to SolarEdge’s manufacturing discontinuation in Mexico and reducing manufacturing levels in China, might have hurt its overall bottom line. This, along with weak top-line expectations, might have dampened SEDG’s earnings in the first quarter of 2024.
Q1 Expectations
The Zacks Consensus Estimate for SolarEdge’s first-quarter sales stands at $194.8 million, which suggests a decrease of 79.4% from the year-ago reported number.
The Zacks Consensus Estimate for SolarEdge Technologies’ first-quarter earnings is pegged at a loss of $1.58 per share, which suggests a deterioration from the year-ago reported earnings of $2.90.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for SEDG this time. 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, which is the case here, as you will see below.
Earnings ESP: SEDG has an Earnings ESP of +2.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Below we have mentioned the following players from the same industry that also have the right combination of elements to beat on earnings in the upcoming releases.
Canadian Solar Inc. (CSIQ - Free Report) is expected to report its first-quarter 2024 results on May 9 before market open. It has an Earnings ESP of +88.57% and carries a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for CSIQ’s first-quarter sales is pegged at $1.28 billion, while that for earnings is pegged at a loss of 26 cents. The company holds a four-quarter average earnings surprise of 56.24%.
Array Technologies (ARRY - Free Report) is set to report first-quarter earnings on May 9 after market close. It has an Earnings ESP of +14.44% and carries a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for ARRY’s first-quarter sales is pegged at $157.5 billion, while that for the earnings is pegged at a loss of 4 cents per share. The company holds a four-quarter average earnings surprise of 265.63%.
Nextracker Inc. (NXT - Free Report) is slated to report its fourth-quarter fiscal 2024 results on May 14 after market close. It has an Earnings ESP of +9.80% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for NXT’s fourth-quarter fiscal 2024 earnings stands at 59 cents per share, which calls for a 181% improvement from the fourth-quarter fiscal 2023 reported figure. The Zacks Consensus Estimate for fiscal fourth-quarter sales is pegged at $681 million, which implies a 31.4% increase from that reported in the prior-year quarter.
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SolarEdge (SEDG) to Report Q1 Earnings: What's in the Cards?
SolarEdge Technologies, Inc. (SEDG - Free Report) is scheduled to release its first-quarter 2024 results on May 8 after market close. In the last reported quarter, the company delivered an earnings surprise of 37.41%.
However, SolarEdge has a negative four-quarter average earnings surprise of 23.57%. Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.
Factors at Play
Since the third quarter of 2023, SolarEdge started to witness slowing market demand for its products as its distributors began to experience financial challenges. Expecting the company to have faced a similar dismal demand environment in the first quarter as well, shipment volumes of SEDG can be expected to be lower than the prior-year quarter’s level, thereby adversely impacting its top-line performance.
SolarEdge Technologies, Inc. Price and EPS Surprise
SolarEdge Technologies, Inc. price-eps-surprise | SolarEdge Technologies, Inc. Quote
Region-wise, unfavorable market dynamics in Europe associated with high interest rates and regulatory issues might have impacted SEDG’s revenues from the European region in the first quarter. In the United States, the continuous slowdown in installations in California due to the rollover of net energy metering (NEM) 2.0. and continued slow growth in the uptake of NEM 3.0 is also likely to have plagued SEDG’s revenues from the U.S. residential market. Nevertheless, favorable revenue contributions can be expected from the U.S. commercial market as well as the solar markets of Australia, Taiwan and Thailand.
In the first quarter of 2024, the company undertook significant cost reduction measures, including a reduction of 16% of its workforce. This might have reduced its operating expenses to some extent.
However, significant restructuring expenses associated with contract manufacturer charges and equipment retirement costs, in addition to expenses in relation to SolarEdge’s manufacturing discontinuation in Mexico and reducing manufacturing levels in China, might have hurt its overall bottom line. This, along with weak top-line expectations, might have dampened SEDG’s earnings in the first quarter of 2024.
Q1 Expectations
The Zacks Consensus Estimate for SolarEdge’s first-quarter sales stands at $194.8 million, which suggests a decrease of 79.4% from the year-ago reported number.
The Zacks Consensus Estimate for SolarEdge Technologies’ first-quarter earnings is pegged at a loss of $1.58 per share, which suggests a deterioration from the year-ago reported earnings of $2.90.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for SEDG this time. 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, which is the case here, as you will see below.
Earnings ESP: SEDG has an Earnings ESP of +2.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, SolarEdge carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Other Stocks to Consider
Below we have mentioned the following players from the same industry that also have the right combination of elements to beat on earnings in the upcoming releases.
Canadian Solar Inc. (CSIQ - Free Report) is expected to report its first-quarter 2024 results on May 9 before market open. It has an Earnings ESP of +88.57% and carries a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for CSIQ’s first-quarter sales is pegged at $1.28 billion, while that for earnings is pegged at a loss of 26 cents. The company holds a four-quarter average earnings surprise of 56.24%.
Array Technologies (ARRY - Free Report) is set to report first-quarter earnings on May 9 after market close. It has an Earnings ESP of +14.44% and carries a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for ARRY’s first-quarter sales is pegged at $157.5 billion, while that for the earnings is pegged at a loss of 4 cents per share. The company holds a four-quarter average earnings surprise of 265.63%.
Nextracker Inc. (NXT - Free Report) is slated to report its fourth-quarter fiscal 2024 results on May 14 after market close. It has an Earnings ESP of +9.80% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for NXT’s fourth-quarter fiscal 2024 earnings stands at 59 cents per share, which calls for a 181% improvement from the fourth-quarter fiscal 2023 reported figure. The Zacks Consensus Estimate for fiscal fourth-quarter sales is pegged at $681 million, which implies a 31.4% increase from that reported in the prior-year quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.