Shares of SolarEdge Technologies soared Tuesday after the maker of solar power components beat third-quarter revenue estimates and provided a sunny outlook. SEDG stock made a double-digit gain in morning action.
Late Monday, SolarEdge reported adjusted earnings of 91 cents a share, well below estimates of $1.41, for the period ended Sept. 30. The miss was primarily due to higher taxes.
But revenue of $836.7 million beat estimates of $827 million. And SolarEdge predicted fourth-quarter revenue in the range of $855 million to $885 million. The midpoint of $870 million is above estimates for $860 million.
SolarEdge stock soared 19.1% to close at 251.73 on the stock market today.
"We are pleased with our results, setting new revenue and operating profit records," Chief Executive Zvi Lando said in a written statement with the earnings release. He added: "The results reflect extremely strong momentum in Europe where our revenue grew 90% compared to the same quarter last year."
SEDG Stock: Strong Momentum In Europe
The company is among a group of solar industry companies to recently report earnings that presented a generally positive view despite industry challenges that include post-pandemic delays, supply chain woes, rising raw material costs and tariffs.
Israel-based SolarEdge is a leading provider of inverters and power optimizers for solar power systems. Inverters convert direct current produced by solar panels into alternating current. Also, the company is transitioning to supplying home energy systems.
Needham analyst Virkram Bagri maintained a buy rating on SEDG stock, but lowered his price target to 370 from 380.
"Demand for SEDG's products remains robust across all geographies," Bagri said in a note to clients. "Furthermore, SolarEdge has a strong product portfolio, a robust pipeline of new products and a seasoned management team."
Solar energy stocks are receiving a big boost from passage of the Inflation Reduction Act, a bill signed in August that provides $369 billion for the development of green energy.
SEDG stock has an IBD Composite Rating of 63 out of a possible 99.
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