Trump and heavy losses drag SolarEdge to new low

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The Israeli solar energy company's market cap is currently $840 million, a fraction of the $19 billion market cap at SolarEdge's peak three years ago.

Israeli solar energy company SolarEdge Technologies (Nasdaq: SEDG) saw its share price fall 22% yesterday on Wall Street as other renewable energy stocks fell sharply following the election of Donald trump as the next US president. Trump's administration is not expected to promote renewable energy.

After trading closed, SolarEdge's share price fell a further 22% in after-hours trading, after announcing its third quarter results. The company's market cap is currently $840 million, a fraction of the $19 billion market cap at SolarEdge's peak three years ago.

At the same time chairman Nadav Zafrir, who next month becomes Check Point Software Technologies Ltd. (Nasdaq: CHKP) CEO has decided to step down, although initially he spoke about holding down both jobs. He will be replaced by veteran director Avery More.

SolarEdge is currently managed by interim CEO and CFO Ronen Faier, has been in crisis for more than a year due to its disappointing financial results. At its peak, distributors bought from it large amounts of equipment for high demand in the market. But demand has fallen while distributors' inventories have remained large and so they are buying much less from SolarEdge. The inventory problem began in 2023 and remains unresolved after two years.

SolarEdge's third quarter was especially weak. The company reported $261 million revenue, which was below the analysts' forecast of $269 million, and a fraction of the $725 million revenue in the corresponding quarter of 2023.

GAAP net loss was $1.21 billion, compared with a GAAP net loss of $130.8 million in the preceding quarter and a GAAP net loss of $61.2 million in the corresponding quarter last year.

Non-GAAP net loss was $874.3 million, compared with a non-GAAP net loss of $101.2 million in the preceding quarter and non-GAAP net loss of $31 million in the corresponding quarter last year.

Faier said, "As SolarEdge weathers this difficult period in the Company’s history, we are diligently pursuing three main priorities: financial stability, recapturing market share and refocusing on our core solar and storage opportunities. We are grateful for our passionate and dedicated workforce and proud of our leadership in technological innovation, all of which I am confident will put the Company back on a profitable growth trajectory."

Published by Globes, Israel business news - en.globes.co.il - on November 7, 2024.

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