Some SolarEdge Technologies, Inc. (NASDAQ:SEDG) Analysts Just Made A Major Cut To Next Year's Estimates

The latest analyst coverage could presage a bad day for SolarEdge Technologies, Inc. (NASDAQ:SEDG), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the 31 analysts covering SolarEdge Technologies, is for revenues of US$3.4b in 2023, which would reflect an uneasy 8.3% reduction in SolarEdge Technologies' sales over the past 12 months. Statutory earnings per share are supposed to sink 14% to US$4.59 in the same period. Prior to this update, the analysts had been forecasting revenues of US$3.8b and earnings per share (EPS) of US$6.73 in 2023. Indeed, we can see that the analysts are a lot more bearish about SolarEdge Technologies' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for SolarEdge Technologies

The consensus price target fell 37% to US$180, with the weaker earnings outlook clearly leading analyst valuation estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 16% by the end of 2023. This indicates a significant reduction from annual growth of 28% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 15% per year. It's pretty clear that SolarEdge Technologies' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for SolarEdge Technologies. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that SolarEdge Technologies' revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of SolarEdge Technologies.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with SolarEdge Technologies, including concerns around earnings quality. For more information, you can click here to discover this and the 1 other flag we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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