Solar power is a booming business and SolarEdge is a leader in green technology, but can it beat expectations this earnings season?
SolarEdge (NASDAQ: SEDG) is a solar business that provides power optimizers, solar inverters, and monitoring systems for photovoltaic arrays. Its stock has seen a decent boost over the last 12 months as demand for solar power solutions has increased. Currently, it is down 34% from its high of $365 in January, but overall it is still up 41% from the year before.
2021’s general stock price decline can be attributed to widespread worries over increased interest rates, which would then negatively impact the number of people willing to fork out for rooftop solar panels. Additionally, in March SolarEdge was affected by changes to solar programs made by California utilities such as Pacific Gas & Electric. This will result in higher connection charges and lower rebates for households that decide to put up solar panels.
Because of these worries, Q1 earnings did not make much of a stir in the investor community. Now that the dust has settled on external issues, here is what to expect for SolarEdge’s Q2 earnings report.
When is SolarEdge’s Q2 earnings date?
SolarEdge will report its earnings for the second quarter of 2021 on Monday, August 2 at 4:30 PM EDT.
How can I listen to SolarEdge’s earnings call?
To listen to the call and to access the transcript, as well as the shareholder’s letter and the financial statements for the quarter, all you need to do is go to SolarEdge’s investor relations page and find the Q2 Earnings Call event.
What to expect from SolarEdge’s Q2 earnings
In Q1 SolarEdge provided the following guidance for Q2:
- Revenue expectations are between $445 million and $465 million.
- Revenue from Solar products alone to come in between $405 million and $420 million.
Analysts’ expectations remain in line with that guidance, expecting around $456.9 million in overall revenue, which will be an increase of 37.7% year-over-year (YoY). Alongside this, expectations for earnings per share are sitting at around $1.12, which will be an increase of 15.5% YoY.
In particular, investors should be looking at SolarEdges solar products sales as this will be an indication of how well the company has been doing in comparison to other photovoltaic companies. There is a lot of competition out there and as such, each SolarEdge, as well as every other solar power business out there, needs to show that it can grow its sales alongside the growth in the industry as a whole.
Another Metric to look at would be the company’s net income. Last quarter saw a reduction in net income YoY from $42 million to $30 million. SolarEdge needs to show that it can increase its profit margins as it brings operations expenses down, demonstrating that it is becoming more efficient with costs as it grows.
If SolarEdge can increase its margins and meet expectations, then this is definitely a stock to watch over the next year or so as it grows into a solar ‘power’ house in the green energy market.
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