SolarEdge (SEDG) reports earnings tomorrow: what to expect

What happened

SolarEdge, a solar power systems company, reports earnings Wednesday before the market opens. Last quarter it beat revenue expectations with $346.2 million, up 19.6% year on year, though next-quarter revenue guidance missed significantly. This quarter, the market expects revenue to decline 4% year on year.

Confirmed

Global impact / market context

SolarEdge rarely misses Wall Street's revenue estimates, and analysts reconfirmed their estimates over the last 30 days. However, the expected 4% revenue decline would reverse last year's 30.4% growth, so investors will compare reported revenue and guidance against these lowered expectations, which could move the stock.

Analyst inference

Among renewable energy peers, Bloom Energy reported revenue growth of 138%, beating estimates by 14.6%, while Nextpower reported revenue up 22.5%, topping estimates by 4%. Bloom Energy still traded down 11.2% after its results, suggesting strong reported numbers alone may not support share prices.

Analyst inference

What to watch

1. SolarEdge's reported revenue for this quarter compared with the 4% year-on-year decline the market expects, since the company rarely misses Wall Street's revenue estimates. Confirmed
2. Forward revenue guidance, which tells investors how much sales management expects next quarter; last quarter's guidance missed significantly and helped set today's lowered expectations. Analyst inference
3. Reaction to peer results, since Bloom Energy fell 11.2% despite beating estimates, showing that strong reported growth does not guarantee a positive share price move. Analyst inference

Evidence

• stockstory.org