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What Awaits SolarEdge Technologies (SEDG) in Q4 Earnings?

Zacks Equity Research

SolarEdge Technologies, Inc. SEDG is set to report fourth-quarter 2018 results on Feb 20, after the market closes.

In the last reported quarter, the company witnessed a positive earnings surprise of 2.38%. The bottom line outpaced the Zacks Consensus Estimate in three of the trailing four quarters, the average beat being 9.29%.

Let’s see how things are shaping up prior to this announcement.

Factors Under Consideration

Growing commercial and residential solar installations in the United States and increasing demand for its inverters in Europe have been constantly driving SolarEdge Technologies’ revenues, of late. These trends are likely to boost the company’s top line in the to-be-reported quarter.

Meanwhile, SolarEdge Technologies continues to invest in manufacturing capacity. This, in turn, is likely to increase shipments to its valued customers and bolster the company’s revenue growth in the to-be-reported quarter. In line with this, the Zacks Consensus Estimate for fourth- quarter revenues is pegged at $249 million, reflecting an annual increase of 31.6%.

In December, SolarEdge Technologies acquired approximately 75% of Kokam Co., a leading provider of lithium ion cells, batteries and energy storage solutions. Although the acquisition will enable the company to further enhance its portfolio and industry leadership in the long run, the deal might have unfavorable impacts on the upcoming quarterly results. This is because SolarEdge Technologies made an aggregate investment of $88 million to purchase Kokam's shares, including transaction-related expenses, which might drag down the former’s bottom line.

As a result, the Zacks Consensus Estimate for fourth-quarter earnings is pegged at 56 cents, reflecting an annual decline of 30%.

What the Zacks Model Unveils

Our proven model does not conclusively show that SolarEdge Technologies is likely to beat estimates in the fourth quarter. This is because a stock needs to have both — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — for this to happen.

Earnings ESP: SolarEdge Technologies has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: SolarEdge Technologies has a Zacks Rank #4 (Sell).

Please note that we caution against stocks with a Zacks Rank #4 or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

SolarEdge Technologies, Inc. Price and EPS Surprise


SolarEdge Technologies, Inc. Price and EPS Surprise | SolarEdge Technologies, Inc. Quote


Upcoming Solar Releases

Canadian Solar Inc. CSIQ sports a Zacks Rank #1 and is scheduled to report fourth-quarter results on March 21. You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunrun Inc. RUN carries a Zacks Rank #3 and is scheduled to report fourth-quarter results on Feb 28.

First Solar Inc. FSLR carries a Zacks Rank #3 and is scheduled to report fourth-quarter results on Feb 21.

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