Earnings Update: SolarEdge Technologies, Inc. (NASDAQ:SEDG) Just Reported And Analysts Are Boosting Their Estimates

SolarEdge Technologies, Inc. (NASDAQ:SEDG) investors will be delighted, with the company turning in some strong numbers with its latest results. SolarEdge Technologies beat expectations with revenues of US$219m arriving 7.5% ahead of forecasts. The company also reported a statutory loss of US$1.70, 5.7% smaller than was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SolarEdge Technologies after the latest results.

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Taking into account the latest results, the consensus forecast from SolarEdge Technologies' 31 analysts is for revenues of US$1.11b in 2025. This reflects a major 21% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 82% to US$5.45. Before this latest report, the consensus had been expecting revenues of US$1.05b and US$5.35 per share in losses.

See our latest analysis for SolarEdge Technologies

The consensus price target held steady at US$15.22despite the upgrade to revenue forecasts and ongoing losses. The analysts seems to think the business is otherwise performing roughly in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic SolarEdge Technologies analyst has a price target of US$27.00 per share, while the most pessimistic values it at US$5.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that SolarEdge Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 2.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect SolarEdge Technologies to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$15.22, with the latest estimates not enough to have an impact on their price targets.

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 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with SolarEdge Technologies , and understanding these should be part of your investment process.

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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.