What Awaits SolarEdge Technologies (SEDG) In Q3 Earnings?

SolarEdge Technologies, Inc. (NASDAQ:SEDG) is set to report third-quarter 2019 results on Nov 6, after market close.

In the last reported quarter, the company witnessed a positive earnings surprise of 9.30%. Moreover, the bottom line surpassed the Zacks Consensus Estimate in three of the trailing four quarters, the average negative surprise being 1.23%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Of late, SolarEdge Technologies has been benefiting from the growing commercial and residential solar installations in the United States. This is evident from the increase in the number of inverters and power optimizers sold by the company over the last few quarters alongside the development of businesses in new markets.

Despite the recent tariff increase on Chinese products, the company’s sales have been on the rise. During the second-quarter earnings call, SolarEdge Technologies reported a significant backlog for the third quarter of 2019.

Also, the company announced its expectation regarding a mass production shipment during the third quarter, led by the production ramp-up in its Vietnam manufacturing facility.

Cumulatively, the aforementioned factors might have favorably impacted the company’s top line during the third quarter. In line with this, the Zacks Consensus Estimate for third-quarter revenues is pegged at $399.7 million, indicating a surge of 69% from the prior-year quarter’s reported figure.

SolarEdge Technologies has been making significant efforts to reduce actual support costs, primarily by deploying tighter control support operations and reducing support-related logistics expenses. These factors are likely to have contributed to the company’s bottom line in the to-be-reported quarter.

In line with this, the Zacks Consensus Estimate for third-quarter earnings is pegged at $1.19, implying a rise of 38.4% from the year-ago quarter’s reported figure.

However, to meet the growing demand for its products and services, the company earlier announced plans for increasing expedited shipment expenditures in the next few quarters, including the third quarter of 2019. This is likely to get reflected in the company's upcoming quarterly results.

SolarEdge Technologies, Inc. Price and EPS Surprise

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for SolarEdge Technologies this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

SolarEdge Technologies has an Earnings ESP of 0.00% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Upcoming Solar Releases

Azure Power Global Ltd (NYSE:AZRE) carries a Zacks Rank #3 and is expected to post second-quarter fiscal 2020 results soon.

Vivint Solar (NYSE:VSLR) carries a Zacks Rank #3 and is expected to post third-quarter 2019 results soon.

A Recent Solar Release

First Solar Inc (NASDAQ:FSLR) reported third-quarter 2019 adjusted earnings of 29 cents per share, missing the Zacks Consensus Estimate of $1.06 by 72.6%. The figure, however, improved from the prior-year quarter’s loss per share of 18 cents.

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