Developer of DC optimized inverter system SolarEdge Technologies (NASDAQ:SEDG) plunged in pre-market trading after issuing a weak first quarter guidance. In the first quarter, SEDG is expecting revenues in the range of $175 million to $215 million, while adjusted gross margin is likely to be between -3% and 1%. This includes around 850 basis points of net Inflation Reduction Act (IRA) manufacturing tax credits. The first quarter revenue outlook was well below Wall Street’s estimates of $406 million.
In the fourth quarter, SEDG posted revenues of $316 million, down 56% year-over-year and below consensus estimates of $323.24 million. The company reported an adjusted net loss of $0.92 per share in Q4 as compared to adjusted earnings of $2.86 per share in the same period last year. Analysts were expecting SEDG to report a loss of $1.34 per share.
The company faced market challenges in the latter half of FY23, with rising interest rates and falling power prices, causing inventory buildup and a slowdown in shipments.
Is SEDG a Good Stock to Buy?
Analysts remained sidelined about SEDG stock with a Hold consensus rating based on six Buys, nine Holds, and four Sells. Over the past year, SEDG has tanked by more than 70%, and the average SEDG price target of $87.45 implies an upside potential of 3.6% at current levels. However, it’s worth noting that estimates will likely change following today’s earnings report.
