Please ensure Javascript is enabled for purposes of website accessibility

Why SolarEdge Technologies Inc.'s Shares Fell 22% Today

By Travis Hoium - May 10, 2016 at 2:26PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Fiscal third-quarter earnings were fine, but guidance left a lot to be desired.

The full-suite SolarEdge is trying to sell to customers. Image source: SolarEdge Technologies.

What: Shares of solar supplier SolarEdge Technologies Inc. (SEDG 1.84%) plunged as much as 22% on Tuesday after releasing fiscal third-quarter results. The stock recovered slightly, and at 1:00 p.m. ET it was down 16%.

So what: Quarterly revenue was up 44.9% from a year ago to $125.2 million and net income fell from $24.1 million to $20.8 million, or $0.47 per share. On an adjusted basis, earnings of $0.58 per share easily topped analyst estimates of $0.39 per share. But third-quarter earnings wasn't what investors were looking at today.  

Management said fiscal fourth-quarter revenue would be between $125 million and $134 million and gross margin will be 29%-21%, down from 32.5% in Q3. Revenue was below the $134.5 million analysts expected and the margin level suggests the company won't hit the expected $0.48 per share in earnings, either.

Now what: SolarEdge's solar customers, including SolarCity, have been experiencing a major slowdown in bookings so far in 2016, and the industry's growth may be slowing more generally. That's put pressure on the company's operations and shares as well. SolarEdge should be able to maintain profitability in the meantime, but growth expectations will probably have to be tempered. And that's why shares are down so much today.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

SolarEdge Technologies, Inc. Stock Quote
SolarEdge Technologies, Inc.
SEDG
$256.81 (1.84%) $4.63

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.