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SolarEdge (SEDG) to Report Q2 Earnings: What's in the Cards?
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SolarEdge Technologies, Inc. (SEDG - Free Report) is scheduled to release its second-quarter 2024 results on Aug 7 after market close. In the last reported quarter, the company delivered a negative earnings surprise of 20.25%.
Moreover, SolarEdge has a negative four-quarter average earnings surprise of 40.24%. Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.
Factors at Play
SolarEdge has been witnessing a significant slowdown in demand for its products for the past couple of quarters, with its distributors facing persistent financial challenges. Such a poor demand environment is likely to have prevailed in the second quarter of 2024 as well, which must have hurt the year-over-year sell-through of SEDG’s optimizers and inverters. This is expected to have hurt the company’s overall top-line performance in the soon-to-be-reported quarter.
SolarEdge Technologies, Inc. Price and EPS Surprise
Region-wise, unfavorable market dynamics in Europe associated with regulatory issues might have impacted SEDG’s revenues from the European region in the second quarter, particularly from Germany and the Netherlands.
Nevertheless, favorable revenue contributions can be expected from the U.S. commercial market as well as the solar markets of Australia, Taiwan, Thailand and Israel. Also, positive synergies from its Wevo acquisition, which SEDG completed in April 2024, are likely to boost its second-quarter operating results.
On the cost front, improvement in warranty costs, reduced accrual rates in relation to the sale of new products, lower shipment costs as well as the company’s cost reduction initiatives are likely to have contributed favorably to the company’s bottom line in the to-be-reported quarter.
However, higher charges from restructuring activities and discontinued operations, as well as dismal sales expectations, might have dampened SolarEdge’s overall earnings in the second quarter of 2024. Also, the continued adoption of SEDG’s lower-margin, single-phase battery in the United States might have hurt its gross margin and earnings, outweighing the margin benefit derived from volume pricing.
Q2 Expectations
The Zacks Consensus Estimate for SolarEdge’s second-quarter sales stands at $258.2 million, which suggests a decrease of 74% from the year-ago reported number.
The Zacks Consensus Estimate for SolarEdge Technologies’ second-quarter earnings is pegged at a loss of $1.56 per share, which implies a deterioration from the year-ago reported earnings of $2.62.
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 +5.13%. 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.
Sunrun (RUN - Free Report) is slated to report its second-quarter 2024 results on Aug 6 after market close. It has an Earnings ESP of +193.49% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for RUN’s second-quarter sales is pegged at $521 million, while that for earnings is pegged at a loss of 26 cents per share. The company holds a four-quarter average earnings surprise of 45.37%.
Shoals Technology Group (SHLS - Free Report) is expected to report its second-quarter 2024 results on Aug 6 after market close. It has an Earnings ESP of +5.88% and carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for SHLS’ second-quarter sales is pegged at $89.8 million, while that for earnings is pegged at 9 cents. The company holds a four-quarter average earnings surprise of 4.99%.
Array Technologies (ARRY - Free Report) is set to report second-quarter earnings on Aug 8 after market close. It has an Earnings ESP of +68.42% and carries a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for ARRY’s second-quarter sales is pegged at $230.4 million, while that for the earnings is pegged at 10 cents per share. The company holds a four-quarter average earnings surprise of 144.80%.
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SolarEdge (SEDG) to Report Q2 Earnings: What's in the Cards?
SolarEdge Technologies, Inc. (SEDG - Free Report) is scheduled to release its second-quarter 2024 results on Aug 7 after market close. In the last reported quarter, the company delivered a negative earnings surprise of 20.25%.
Moreover, SolarEdge has a negative four-quarter average earnings surprise of 40.24%. Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.
Factors at Play
SolarEdge has been witnessing a significant slowdown in demand for its products for the past couple of quarters, with its distributors facing persistent financial challenges. Such a poor demand environment is likely to have prevailed in the second quarter of 2024 as well, which must have hurt the year-over-year sell-through of SEDG’s optimizers and inverters. This is expected to have hurt the company’s overall top-line performance in the soon-to-be-reported quarter.
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 regulatory issues might have impacted SEDG’s revenues from the European region in the second quarter, particularly from Germany and the Netherlands.
Nevertheless, favorable revenue contributions can be expected from the U.S. commercial market as well as the solar markets of Australia, Taiwan, Thailand and Israel. Also, positive synergies from its Wevo acquisition, which SEDG completed in April 2024, are likely to boost its second-quarter operating results.
On the cost front, improvement in warranty costs, reduced accrual rates in relation to the sale of new products, lower shipment costs as well as the company’s cost reduction initiatives are likely to have contributed favorably to the company’s bottom line in the to-be-reported quarter.
However, higher charges from restructuring activities and discontinued operations, as well as dismal sales expectations, might have dampened SolarEdge’s overall earnings in the second quarter of 2024. Also, the continued adoption of SEDG’s lower-margin, single-phase battery in the United States might have hurt its gross margin and earnings, outweighing the margin benefit derived from volume pricing.
Q2 Expectations
The Zacks Consensus Estimate for SolarEdge’s second-quarter sales stands at $258.2 million, which suggests a decrease of 74% from the year-ago reported number.
The Zacks Consensus Estimate for SolarEdge Technologies’ second-quarter earnings is pegged at a loss of $1.56 per share, which implies a deterioration from the year-ago reported earnings of $2.62.
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 +5.13%. 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.
Sunrun (RUN - Free Report) is slated to report its second-quarter 2024 results on Aug 6 after market close. It has an Earnings ESP of +193.49% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for RUN’s second-quarter sales is pegged at $521 million, while that for earnings is pegged at a loss of 26 cents per share. The company holds a four-quarter average earnings surprise of 45.37%.
Shoals Technology Group (SHLS - Free Report) is expected to report its second-quarter 2024 results on Aug 6 after market close. It has an Earnings ESP of +5.88% and carries a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for SHLS’ second-quarter sales is pegged at $89.8 million, while that for earnings is pegged at 9 cents. The company holds a four-quarter average earnings surprise of 4.99%.
Array Technologies (ARRY - Free Report) is set to report second-quarter earnings on Aug 8 after market close. It has an Earnings ESP of +68.42% and carries a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for ARRY’s second-quarter sales is pegged at $230.4 million, while that for the earnings is pegged at 10 cents per share. The company holds a four-quarter average earnings surprise of 144.80%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.