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

The analysts covering SolarEdge Technologies, Inc. (NASDAQ:SEDG) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. 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. Bidders are definitely seeing a different story, with the stock price of US$25.29 reflecting a 19% rise in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

After the downgrade, the consensus from SolarEdge Technologies' 32 analysts is for revenues of US$1.1b in 2024, which would reflect a concerning 27% decline in sales compared to the last year of performance. Losses are forecast to hold steady at around US$8.98 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$1.3b and losses of US$7.63 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for SolarEdge Technologies

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 46% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 18% 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 18% annually for the foreseeable future. It's pretty clear that SolarEdge Technologies' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that SolarEdge Technologies' revenues are expected to grow slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on SolarEdge Technologies, and a few readers might choose to steer clear of the stock.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for SolarEdge Technologies going out to 2026, and you can see them free on our platform here.

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 with high insider ownership.

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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.