SolarEdge stock tumbles on weak Q1 outlook
Shares of SolarEdge Technologies (SEDG) fell sharply due to a weak first-quarter revenue outlook. While SolarEdge posted mixed fourth-quarter results, investors focused on the guidance, leading to the selloff.
Specifically, SolarEdge forecasted first-quarter revenues between $175 million and $215 million, well below analyst estimates for $373.2 million.
Yahoo Finance's Julie Hyman and Josh Lipton breaks down the details.
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Editor's note: This article was written by Angel Smith
Video Transcript
JULIE HYMAN: And we've got another stock in the red today that we want to check on as well. It is SolarEdge sinking after the company posted a mixed earnings report as well as some weaker-than-expected revenue guidance due to a slowdown in residential demand and increasing inventories. And this was quite a miss in terms of that revenue forecast here. The company's inverters convert solar power into usable energy. First-quarter revenue going to be at most $215 million. The forecast from analysts were more like $373 million. So you see there a big shortfall when it comes to SolarEdge.
JOSH LIPTON: Yeah, there was sort of interesting comments from the CEO too, talk about 2023, Julie, saying first half, record installations. But then he talked about this kind of shift in the second half, weaker market. He talked about higher interest rates, lower power prices, resulting, he told the Street, in inventory buildup. Goes on to say he believes they are well positioned for the next growth cycle. But clearly, at least today, some investors are kind of skeptical.
JULIE HYMAN: Yeah. And he basically said things are not going to get better until interest rates go down. So so many companies that we talk about were looking for stabilization, predictability in interest rates. This is one, much like the housing sector, where he says the rates actually have to go down for something to change.
