It has been about a month since the last earnings report for SolarEdge Technologies (SEDG). Shares have lost about 17.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is SolarEdge due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important drivers.
SolarEdge Technologies Q2 Earnings Beat, Revenues Increase Y/Y
SolarEdge reported a second-quarter 2025 adjusted loss of 81 cents per share, narrower than the Zacks Consensus Estimate of a loss of 82 cents. The bottom line also improved from the prior-year quarter’s loss of $1.79.
Barring one-time adjustments, the company incurred a GAAP loss of $2.13 per share compared with a GAAP loss of $2.31 in the year-ago period.
The year-over-year improvement in the bottom line can be attributed to higher revenues, significantly improved gross profit and lower operating expenses incurred in the second quarter compared with the prior-year quarter.
SEDG’s Revenues
The company’s revenues of $289.4 million surpassed the Zacks Consensus Estimate by 5.7%. The top line also increased 9.1% from the year-ago quarter’s $265.4 million.
SEDG’s Operational Highlights
SolarEdge Technologies shipped a total of 1,194 megawatt-alternate current (MWac) of inverters and 247 megawatt-hours of batteries in the second quarter.
The company reported an adjusted gross profit of $36.9 million compared with the adjusted gross profit of $0.5 million in the prior-year period.
Adjusted operating expenses declined 25.8% year over year to $85.2 million.
SEDG incurred an adjusted operating loss of $48.3 million compared with an operating loss of $114.3 million in the prior-year quarter.
SEDG’s Financial Performance
As of June 30, 2025, SolarEdge Technologies had cash and cash equivalents worth $545.2 million compared with $274.6 million as of Dec. 31, 2024.
The net cash inflow from operating activities during the first six months of 2025 amounted to $26 million against the cash outflow of $261.8 million recorded a year ago.
As of June 30, 2025, total long-term liabilities were $960.5 million, 3.2% higher than the figure reported at the end of 2024.
SEDG’s Q3 2025 Guidance
SEDG expects revenues in the range of $315-$355 million for the third quarter of 2025. The Zacks Consensus Estimate is pegged at $332.8 million, lower than the midpoint of the company’s guided range.
Adjusted operating expenses are projected in the range of $85-$90 million, while the adjusted gross margin is expected between 15% and 19%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in fresh estimates.
The consensus estimate has shifted 11.42% due to these changes.
VGM Scores
Currently, SolarEdge has a great Growth Score of A, a grade with the same score on the momentum front. However, the stock has a grade of F on the value side, putting it in the lowest quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, SolarEdge has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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SolarEdge Technologies, Inc. (SEDG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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