Why SolarEdge Technologies Stock Is Shining Today
Key Points
SolarEdge Technologies' stock soared after topping Wall Street's earnings and revenue expectations.
Management also gave upbeat guidance for the next quarter, forecasting stronger revenue and margins.
This could be a shareholder-friendly turnaround story.
Shares of SolarEdge Technologies (NASDAQ: SEDG) caught a welcome ray of sunlight on Tuesday. The stock jumped as much as 20.3% higher in the morning session, backing down to a still-impressive gain of 16% at noon ET today. The maker of power management systems used in solar power installations crushed Wall Street's expectations in this morning's first-quarter report.
SolarEdge beat the Street in Q1 2025
Your average analyst expected SolarEdge to report an adjusted net loss of $1.16 per share, based on revenue in the neighborhood of $204.2 million. It was a gloomy forecast, but the actual figures told a different story.
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Sales rose 12% year over year to $219.5 million. The adjusted loss stopped at $1.14 per share, compared to a $3.52 loss per share in the year-ago period.
Management's guidance for the next quarter also came in well above the current analyst view. Revenue should land near $275 million, up from $265 million in the second quarter of 2024. The consensus analyst projection points to $243.7 million.
Gross margins should also increase while operating expenses are trending downward. At the midpoint of the suggested guidance ranges, SolarEdge's loss from operations would decrease from $102.7 million in the first quarter to $65 million in the next report.
Image source: Getty Images.
How SolarEdge is finding its sunny side again
CEO Shuki Nir admitted that the economy is unpredictable right now but still insisted that SolarEdge's turnaround effort will continue paying off in the second quarter.
The company is winning back market share in key segments such as residential rooftop solar and large commercial installations. It manufactures its power inverters in American factories, helping installers meet domestic content minimums to qualify for tax breaks.
SolarEdge is also reshuffling its assets, collecting some easy cash by divesting unprofitable operations like the system-tracking service and a Korea-based battery factory.
This may not be the most promising economy ever for solar power experts, but I like what management is doing. Turnarounds are never easy, and many things can go wrong along the way. Still, this report makes me a little more confident in its ability to become profitable again. And don't forget that the stock is trading 75% below its yearly highs, even after Tuesday's big jump.
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