SolarEdge Technologies, Inc. SEDG is scheduled to release third-quarter 2024 results on Nov. 6, after market close. In the last reported quarter, the company delivered a negative earnings surprise of 11.88%.
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SolarEdge has a negative four-quarter average earnings surprise of 43.90%. Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.
SolarEdge Technologies, Inc. Price and EPS Surprise
SolarEdge Technologies, Inc. price-eps-surprise | SolarEdge Technologies, Inc. Quote
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 third quarter as well, which must have hurt the year-over-year sell-through of SEDG’s optimizers, inverters as well as batteries. This is expected to have hurt the company’s overall top-line performance in the soon-to-be-reported quarter.
Low revenues generated from e-mobility components, related to the discontinuation of the company’s LCV e-Mobility activity, are also likely to have hurt quarterly revenues.
Region-wise, unfavorable market dynamics in Europe associated with regulatory issues might have adversely impacted SEDG’s revenues from the European region, particularly from the Netherlands.
Nevertheless, favorable revenue contributions can be expected from the U.S. commercial market.
On the cost front, improvement in warranty costs, 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, dismal sales expectations, and additional expenses related to the ramp-up of SEDG’s U.S. manufacturing might have dampened its overall earnings performance in the third quarter.
Q3 Expectations
The Zacks Consensus Estimate for sales is pegged at $269.3 million, which suggests a decrease of 62.9% from the year-ago reported number.
The Zacks Consensus Estimate for earnings is pegged at a loss of $1.55 per share, which implies a deterioration from the year-ago reported loss of 55 cents.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for SEDG this time around. 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 +19.10%. 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 sector that also have the right combination of elements to beat on earnings this reporting cycle.
Sunrun RUN is slated to report third-quarter 2024 results on Nov 7., after market close. It has an Earnings ESP of +12.57% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for RUN’s third-quarter sales is pegged at $560.1 million, while that for earnings is pinned at a loss of 16 cents per share. The company delivered a trailing four-quarter average earnings surprise of 79.87%.
Constellation Energy Corporation CEG is expected to report third-quarter 2024 results on Nov. 4, before market open. It has an Earnings ESP of +3.92% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for sales is pegged at $6.21 billion, while that for earnings is pinned at $2.72 per share. The company delivered an earnings surprise of 17.48% in the last reported quarter.
Energy Transfer ET is set to report third-quarter results on Nov. 6, after market close. It has an Earnings ESP of +7.29% and a Zacks Rank of 3 at present.
The Zacks Consensus Estimate for sales is pegged at $24.23 billion, while that for earnings is pinned at 32 cents per share. The company delivered a trailing four-quarter average earnings surprise of 5.15%.
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