SolarEdge Plunges, Pulls Down Entire Solar Energy Sector

On Friday, SolarEdge Technologies (SEDG) shed more than $1.00 billion off its market cap, devastating the global solar energy industry.

SEDG stock price plummeted by -27.27% to $82.90 per share on October 20. However, analysts expect it to recover up to 3.00% to $85.39 apiece by the end of the next session.

SolarEdge stocks retreated by -35.06% from the closing price of $127.65 last Tuesday and -72.00% year-to-date. The company released its preliminary third-quarter financial data on October 19, which triggered the disastrous week.

Its initial unaudited financial results for Q3, ending September 30, highlighted unexpected cancellations from European distributors. More importantly, the report downgraded the expected median revenue for the quarter by 19.44%, from $900.00 million to $725.00 million.

As a result, SolarEdge adjusted its expected GAAP gross margin within the 19.00% to 20.00% range. Hence, stakeholders now brace for a GAAP operating loss of $9.00 million to $28.00 million.

In addition, the non-GAAP gross margin has been downwardly revised from 28.00% to 31.00% to 20.10% to 21.10%. Likewise, the median non-GAAP operating income has fallen by 82.80% to $21.50 million from $125.00 million.

The Israel-based solar energy company has not experienced negative growth since the first quarter of 2021. SolarEdge will publish its Q3 2023 final reports on November 01.

Solar Energy Market Gets Yanked Down by SolarEdge

The overall outlook on the worldwide solar energy industry soured after SolarEdge’s profit warning. Invesco Solar ETF (TAN), the sector’s top benchmark, closed last week -2.83% lower at $43.92 per share.

Similarly, share prices for Enphase Energy (ENPH), SunPower (SPWR), and Sunnova Energy (NOVA) slid by -14.90%, -9.40%, and -9.10%, respectively. Moreover, the price per stock of JinkoSolar (JKS) dropped by -6.40% and Sunrun (RUN) by -6.30%.

Europe’s stockpiling of Chinese solar panels is another reason for the decline of SolarEdge and providers based in other regions. Most sustainable energy companies did not expect the EU to choose China as its partner in alleviating its energy crisis.

Solar panel manufacturers now scramble to find alternative buyers for inventories they have originally planned to sell in the bloc.