Let’s dig into the relative performance of SolarEdge (NASDAQ:SEDG) and its peers as we unravel the now-completed Q3 renewable energy earnings season.
Renewable energy companies are buoyed by the secular trend of green energy that is upending traditional power generation. Those who innovate and evolve with this dynamic market can win share while those who continue to rely on legacy technologies can see diminishing demand, which includes headwinds from increasing regulation against “dirty” energy. Additionally, these companies are at the whim of economic cycles, as interest rates can impact the willingness to invest in renewable energy projects.
The 16 renewable energy stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 10.2% while next quarter’s revenue guidance was 8.4% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
SolarEdge (NASDAQ:SEDG)
Established in 2006, SolarEdge (NASDAQ: SEDG) creates advanced systems to improve the efficiency of solar panels.SolarEdge reported revenues of $260.9 million, down 64% year on year. This print fell short of analysts’ expectations by 3.7%. Overall, it was a disappointing quarter for the company with revenue guidance for next quarter missing analysts’ expectations significantly and a significant miss of analysts’ adjusted operating income estimates.
Unsurprisingly, the stock is down 17.4% since reporting and currently trades at $12.12.
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Best Q3: EVgo (NASDAQ:EVGO)
Created through a settlement between NRG Energy (NYSE:NRG) and the California Public Utilities Commission, EVgo (NASDAQ:EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States.EVgo reported revenues of $67.54 million, up 92.4% year on year, outperforming analysts’ expectations by 2.4%. The business had an exceptional quarter with an impressive beat of analysts’ EPS and EBITDA estimates.
EVgo scored the fastest revenue growth among its peers. However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $5.37.
Blink Charging (NASDAQ:BLNK)
One of the first EV charging companies to go public, Blink Charging (NASDAQ:BLNK) is a manufacturer, owner, operator, and provider of electric vehicle charging equipment and networked EV charging services.Blink Charging reported revenues of $25.19 million, down 41.9% year on year, falling short of analysts’ expectations by 28.1%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a significant miss of analysts’ adjusted operating income estimates.
Blink Charging delivered the weakest full-year guidance update in the group. As expected, the stock is down 16.9% since the results and currently trades at $1.67.
Shoals (NASDAQ:SHLS)
Started in Huntsville, Alabama, Shoals (NASDAQ:SHLS) designs and manufactures products that make solar energy systems work more efficiently.Shoals reported revenues of $102.2 million, down 23.9% year on year. This print beat analysts’ expectations by 3.4%. Taking a step back, it was a mixed quarter as it also produced revenue guidance for next quarter exceeding analysts’ expectations but a significant miss of analysts’ adjusted operating income estimates.
The stock is down 13.7% since reporting and currently trades at $4.98.
Generac (NYSE:GNRC)
With its name deriving from a combination of “generating” and “AC”, Generac (NYSE:GNRC) offers generators and other power products for residential, industrial, and commercial use.Generac reported revenues of $1.17 billion, up 9.6% year on year. This number topped analysts’ expectations by 1%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ EBITDA estimates.
The stock is up 15.3% since reporting and currently trades at $190.30.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
