SolarEdge Shares Dimmer as Sales Trail Expectations

SolarEdge shares are down after the solar-inverter maker reported third-quarter revenue dropped 18%.
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SolarEdge Technologies  (SEDG) - Get Report shares dropped on Tuesday after the maker of solar inverters posted lower-than-expected third-quarter revenue and a lower-than-expected fourth-quarter sales estimate.

Shares of the Herzliya, Israel, company recently traded at $216, down 19%. They had nearly tripled year to date through Monday

Revenue fell 18% in the quarter to $338.1 million from $410.6 million in the year-earlier quarter. The FactSet analyst consensus called for $343 million in the latest quarter.

Net income registered $43.8 million, or 83 cents a share, in the latest quarter, up from $41.6 million, or 81 cents, a year earlier. Adjusted earnings totaled $1.21 a share, unchanged from a year earlier. The analyst consensus called for adjusted EPS of 74 cents a share.

SolarEdge estimated fourth-quarter sales will total $345 million to $365 million. The analyst consensus called for $391 million.

J.P. Morgan analyst Paul Coster cut his share-price target to $239 from $252 but affirmed his rating at overweight.

"SEDG reported mixed third-quarter results and issued fourth-quarter guidance below expectations, primarily owing to weakness in the company’s [commercial and industrial] segment, which is recovering slower than expected from the covid-19 downturn," he wrote in a commentary. 

"Additionally, the company’s next-generation storage solution has been delayed by a few months owing to travel restriction impacts on the certification process."

On the plus side, "the higher-margin residential business seems to be tracking expectations," Coster said. 

"We recommend long-term investors buy any weakness in the stock induced by this print as we believe the headwinds are timing-related and not an indication of a change in the company's growth opportunity or market position."