SolarEdge Technologies to Report Q1 Earnings: What's in the Cards?

SolarEdge Technologies, Inc. SEDG is scheduled to release its first-quarter 2025 results on May 6, before market open.

In the last reported quarter, the company delivered a negative earnings surprise of 124.20%. Moreover, SolarEdge has a negative four-quarter average earnings surprise of 261.34%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Let’s discuss the factors that are likely to be reflected in the upcoming quarterly results.

Factors at Play Ahead of SEDG’s Q1 Results

SolarEdge has been witnessing a significant downturn in demand for its products in recent quarters, with its distributors encountering continuous financial challenges. Such a low demand situation is projected to have persisted in the first quarter of 2025 as well, particularly in Europe, which must have hurt the year-over-year sell-through of SEDG’s optimizers, batteries and inverters. This is expected to have hurt the company’s overall top-line performance in the soon-to-be-reported quarter.

High inventory levels in the distribution channels are also likely to have adversely impacted SEDG’s revenues from the European region. Moreover, with the solar energy market being subject to seasonal fluctuations in weather, SolarEdge’s revenues might have been affected by the cold weather (which hurts PV installation rates) in the January-March quarter.

Nevertheless, favorable revenue contributions expected from the U.S. commercial market must have aided the company’s overall revenue performance in the first quarter. Furthermore, SolarEdge's Florida manufacturing facility was on target to have a run rate capacity of 2 million optimizers per quarter in the first quarter of 2025, which, if duly accomplished, may have benefited its top-line performance to some extent.

On the cost front, the company’s cost reduction initiatives, including workforce reductions and operational cost-cutting, are likely to have boosted SEDG’s earnings performance.

SolarEdge can be expected to have generated positive free cash flow in the first quarter of 2025, driven by disciplined cash management and inventory reductions.

SEDG’s Q1 Expectations

The Zacks Consensus Estimate for SEDG’s sales stands at $203.8 million, which suggests a drop of 0.3% from the year-ago reported number.

The Zacks Consensus Estimate for earnings is pegged at a loss of $1.20 per share, which implies a significant improvement from the year-ago reported loss of $1.90.

What the Zacks Model Unveils for SEDG

Our proven model does not conclusively predict an earnings beat for SEDG this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.

Earnings ESP: SEDG has an Earnings ESP of -8.73%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, SolarEdge carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are three companies from the same sector that have the right combination of elements to post an earnings beat this reporting cycle.

Shoals Technologies Group SHLS is slated to report its first-quarter 2025 results on May 6, before market open. It has an Earnings ESP of +3.23% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for SHLS’ first-quarter earnings is pegged at 4 cents per share. The consensus estimate for its sales is pegged at $73.9 million.

Energy Transfer ET is expected to report its first-quarter 2025 results on May 6, after market close. It has an Earnings ESP of +1.54% and carries a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for ET’s first-quarter sales is pegged at $23.37 billion, which calls for an 8.1% improvement from the year-ago quarter’s figure. The consensus estimate for first-quarter earnings stands at 33 cents per share, which implies year-over-year growth of 3.1%.

APA Corporation APA is set to report first-quarter earnings on May 7, after market close. It has an Earnings ESP of +4.52% and carries a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for APA’s first-quarter sales is pegged at $2.21 billion, which calls for a 16.3% improvement from the year-ago quarter’s figure. The consensus estimate for first-quarter earnings stands at 83 cents per share, which implies year-over-year growth of 6.4%.

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This article originally published on Zacks Investment Research (zacks.com).

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