Yahoo Finance US$71.97: That's What Analysts Think SolarEdge Technologies, Inc. (NASDAQ:SEDG) Is Worth After Its Latest Results
There's been a notable change in appetite for SolarEdge Technologies, Inc. (NASDAQ:SEDG) shares in the week since its first-quarter report, with the stock down 18% to US$49.47. Revenues of US$204m beat expectations by a respectable 4.8%, although statutory losses per share increased. SolarEdge Technologies lost US$2.75, which was 27% more than what the analysts had included in their models. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for SolarEdge Technologies
Following the recent earnings report, the consensus from 33 analysts covering SolarEdge Technologies is for revenues of US$1.44b in 2024. This implies a stressful 36% decline in revenue compared to the last 12 months. Per-share losses are expected to explode, reaching US$7.10 per share. Before this earnings announcement, the analysts had been modelling revenues of US$1.51b and losses of US$4.48 per share in 2024. While this year's revenue estimates dropped there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target fell 8.1% to US$71.97, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values SolarEdge Technologies at US$124 per share, while the most bearish prices it at US$44.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that revenue is expected to reverse, with a forecast 44% annualised decline to the end of 2024. That is a notable change from historical growth of 23% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 17% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SolarEdge Technologies is expected to lag the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at SolarEdge Technologies. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on SolarEdge Technologies. Long-term earnings power is much more important than next year's profits. We have forecasts for SolarEdge Technologies going out to 2026, and you can see them free on our platform here.
You can also see our analysis of SolarEdge Technologies' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
