SolarEdge Earnings Beat Expectations But Tariffs Weigh On Profitability, Analyst Warns

JPMorgan analyst Mark Strouse cut the price forecast on SolarEdge Technologies, Inc. (NASDAQ:SEDG) following first-quarter earnings results reported on Tuesday.

The analyst revised the price forecast from $20 to $18, while retaining an Overweight rating.

The company reported revenues of $219.5 million. That’s up 12% sequentially. It also beat the consensus of $203.66 million and reported an adjusted loss per share of $1.14, beating the Street View for a loss of $1.16.

For the second quarter, the company expects revenue of $265 million-$285 million (versus consensus of $247.96 million. It also anticipates adjusted gross margin of 8% – 12%.

The analyst says that the results slightly beat expectations, and its second-quarter revenue guidance is also slightly above expectations.

Nevertheless, the gross margin guidance just met consensus, including a 200 bps US tariff headwind, adds the analyst.

Strouse notes that SEDG expects increased tariff impact in the second half of FY25 and projects free cash flow to break even (down from positive due to tariffs), but they can likely repay September convertible debt with cash.

Europe remains soft, but channel destocking should normalize by the end of the second quarter, and SEDG believes its regional market share has improved, says the analyst.

The analyst revised FY25 adjusted EPS estimate to $(2.49) from $(1.63).

On Wednesday, the company unveiled its new solar-powered EV charging solution for businesses, which is available immediately.

Businesses using SolarEdge solar systems can now utilize “power-optimized” solar energy to charge their EV fleets, leading to significant reductions in energy expenses, with an early beta customer reporting roughly a 70% decrease in EV charging costs.

Investors can gain exposure to the stock via ProShares S&P Kensho Cleantech ETF (NYSE:CTEX) and SPDR S&PKensho Clean Power ETF (NYSE:CNRG).

Price Action: SolarEdge shares are up 2.02% at $14.66 at the last check on Wednesday.

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