SolarEdge Technologies (NASDAQ:SEDG) shares plunged Thursday after the company's third-quarter earnings and revenue missed consensus expectations.
At the time of writing, SEDG shares are down around 15%, trading below the $65 per share mark.
The company posted Q3 EPS of $0.55 after the close on Wednesday, $0.28 worse than the analyst estimate of $0.83, while revenue for the quarter came in at $725.31 million, down 27% QoQ and 13% YoY. It was also well below the consensus estimate of $769.19 million.
The company's solar segment revenues disappointed, coming in at $676.4 million, down 29% from $947.4 million in the prior quarter and down 14% from $788.6 million in the same quarter last year.
SEDG said its results reflected a slow market environment, which resulted in a high inventory of its products in distribution channels, especially in Europe.
“While channel inventory clearing is expected to continue in coming quarters, we are optimistic about the future of the solar PV industry and are confident that our leading technology, global presence and broad product offering will enable us to continue to be a leader in this market,” said Zvi Lando, Chief Executive Officer of SolarEdge.
Following the report, BMO Capital downgraded shares of SEDG to Market Perform and lowered its price target for the stock to $68 per share.
"Analysts believe distributed solar generation is still a secular growth story, both in Europe and the U.S. However, it has become apparent that the base level of demand in 2022 is not the correct starting point," said analysts.
"Analysts previously saw merit and value in looking past a 2023 air pocket in demand for SEDG. However, its updated view of normalized gross and operating margins during today’s earnings call disappointed, causing analysts to move to the sidelines."