SolarEdge Technologies shares sank to their lowest level in nearly four months on Wednesday after the solar-equipment maker pointed to potentially lower sales in the current quarter. The drop overshadowed progress on the company's data-center transformer project, as investors focused on a weak revenue outlook tied mainly to Europe.
Shares of SolarEdge Technologies dropped more than 25% on Wednesday. The stock was on track to close at its lowest point since April 15, when it settled at $37.83. The maker of inverters and other solar equipment had called for potentially lower sales in the current quarter.
Guidance trails Wall Street estimates
SolarEdge guided for third-quarter sales between $310 million and $340 million, compared with a Wall Street consensus of $365 million, according to FactSet. The outlook was a disappointing aspect of an otherwise good earnings report, RBC Capital Markets' Chris Dendrinos said. The company said the potential decline would mostly come from its Europe business, though it also continues to see weakness in the U.S., particularly in the residential solar market.
That guidance followed second-quarter sales of $342 million, up nearly 20% from a year earlier and in line with analyst expectations. SolarEdge also swung to an adjusted profit of five cents a share, beating a forecast for a three-cent adjusted loss, according to FactSet. Even so, the stock is up nearly 30% this year after more than doubling in 2025.
Data-center transformer project moves to demonstrations
SolarEdge has drawn AI and data-center investors since announcing plans last year for a utility-scale transformer designed to handle data-center electric loads more efficiently. The project recently shifted to live demonstrations, and the company showed potential customers and their engineering teams a working prototype a couple of weeks ago, CEO Shuki Nir said on a call with analysts.
Nir said SolarEdge expects a fully working, proof-of-concept prototype by the end of the year and plans to establish pilot programs at data centers next year. He said the transformer could become a "meaningful" source of revenue for the company in 2028. SolarEdge is also planning an investor day next month to detail the project's potential market size and revenue streams.
Source: MarketWatch
Trading involves risk.
Risk Disclaimer
