Investors in solar technology company SolarEdge Technologies (SEDG -2.23%) are feeling pretty sunny this week. Shares of the company jumped after it reported third-quarter earnings Monday evening, and then kept rising. By midday trading on Friday, SolarEdge shares were higher by about 32% for the week, according to data provided by S&P Global Market Intelligence.
Investors cheered the company's quarterly report after it achieved record revenue from both its solar segment and overall business. Sales beat expectations and management provided an outlook for the fourth quarter saying growth will continue.
SolarEdge stock jumped 19% on the trading day following that release, but continued to move higher throughout the week. That extra boost mainly came from the economic data that was released on Thursday.
Third-quarter sales were 59% higher than the prior-year period and grew 15% sequentially from the second quarter. And the company provided an outlook for fourth-quarter revenue of $870 million at the midpoint of guidance, which would be an increase of another 4%.
On the conference call for investors, CEO Zvi Lando credited "significant growth in Europe" for driving revenue growth in the solar segment. Lando also added that there is increasing demand in the U.S. market, and the company plans to add manufacturing capacity in the U.S. next year. He believes passage of the Inflation Reduction Act (IRA) will help spur continued growth in the United States market.
Investors are also seeing the more general economic data released this week as a catalyst for the solar energy sector and SolarEdge. The Consumer Price Index (CPI) showed prices moved up by just 0.4% in October, which was less than the 0.6% economists expected. The index itself climbed 7.7% on an annual basis, marking a decline from September. If inflation is indeed easing, and it leads to a slowdown in the rise of interest rates, it will continue to help businesses and stocks in high-growth sectors like solar.