Energy-tech small cap SolarEdge guides for lower sales in 3Q26; shares plunge
SolarEdge retreated to a multi-month low after the maker of inverters and other solar equipment called for potentially lower sales in 3Q26 / Photo: Facebook / SolaredgePV
Shares of alternative energy solutions provider SolarEdge plunged 30% on Wednesday to their lowest level since mid-March. The management indicated in its guidance that revenue could decline in the third quarter.
Details
SolarEdge, which manufactures residential solar systems and power plants for industrial customers, fell 30% on the Nasdaq on Wednesday to $33.90 per share. That marked a nearly five-month low.
The company guides for third-quarter revenue of $310-340 million. The upper end of the range matches its revenue in the same period of 2025, while the lower end implies a decline of around 9% year over year.
The guidance was also below the Wall Street consensus estimate of $365 million, MarketWatch notes. It mainly reflects a seasonal decline in SolarEdge’s European sales and soft demand in the U.S., according to GuruFocus.
What analysts say
The sales outlook was a disappointing aspect of SolarEdge’s otherwise good financial results for the second quarter, RBC Capital Markets analyst Chris Dendrinos was quoted by MarketWatch as saying.
On Wednesday, the company reported that revenue in the April-June period increased around 20% year over year to $346.2 million, while its net loss narrowed fourfold to $30.8 million. SolarEdge CEO Shuki Nir noted that “we returned to non-GAAP operating profitability for the first time since the second quarter of 2023,” the figure coming in at $10.2 million, versus a loss of $24.8 million in the first quarter of this year.
The main growth driver in the second quarter was the residential segment, Nir said. He also noted strong demand for the company’s solutions in Europe and from commercial and industrial customers.
SolarEdge is pinning its business prospects on a new solid-state transformer designed for data centers, writes MarketWatch. A couple of weeks earlier, the company demonstrated a working prototype to potential customers and their engineering teams, Nir said during the earnings call with analysts.
SolarEdge expects to have a fully working proof-of-concept prototype by the end of the year and to launch pilot programs at data centers next year. The new transformer could become a “meaningful” source of revenue for the company in 2028, Nir believes.
Despite the company’s promises, Wall Street is not particularly upbeat on the stock. SolarEdge has 19 “hold” ratings versus seven “sell” recommendations and only one “buy” call. The average target price is $39.70 per share, implying 17% upside from the latest close.
