JPMorgan Lowers SolarEdge Estimates After Enphase's Q3 Results
- JPMorgan analyst lowered SolarEdge's Q3 earnings estimate to a loss of 38 cents per share after Enphase Energy's disappointing results.
- The company's stock has plummeted over 80% year to date, with expected cash burn raising liquidity concerns.
- SolarEdge is scheduled to report its third-quarter results on November 6, with investor focus on financial health amidst European market challenges.
In Europe, SolarEdge Technologies Inc. is facing significant challenges as indicated by a downward revision in its earnings estimates. Following the release of third-quarter results from Enphase Energy, which showcased a 34% sequential decline in sales in Europe, JPMorgan analyst Mark Strouse lowered SolarEdge's earnings forecast for Q3 to a loss of 38 cents per share, previously estimated at a loss of 12 cents. This decline has resulted in SolarEdge’s stock price dropping by over 80% year to date, contributing to broader concerns about the company's financial health. Approximately 60% to 65% of SolarEdge's revenue is derived from Europe, making the company particularly vulnerable to market conditions in the region. Strouse maintained an Overweight rating but adjusted the price target from $35 to $29, citing liquidity issues as a potential overhang affecting the stock until cash generation visibility improves. Furthermore, SolarEdge may experience cash burn of around $173 million between Q3 2024 and Q1 2025, raising concerns among investors regarding its long-term viability. SolarEdge is scheduled to release its earnings results on November 6, and the market is watching closely to gauge the company's response to these ongoing challenges.