SEDG - SolarEdge Technologies' Q4 Miss Could Be Due To Structural Issues: 7 Analysts Provide Their Takeaways | Benzinga
SolarEdge Technologies Inc (NASDAQ: SEDG) shares tanked in early trading on Wednesday, after the company issued weak first-quarter guidance.
The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.
RBC Capital Markets On SolarEdge Technologies
Analyst Christopher Dendrinos maintained a Sector Perform rating while reducing the price target from $85 to $77.
"SEDG's manufacturing strategy utilizes a combination of in-house and contract manufacturers that results in a higher fixed cost structure,” Dendrinos wrote in a note.
While this proved to be a benefit when revenues were rising, as "fixed costs spread across more unit sales,” it turned into "an increasing headwind as revenues decline,” the analyst stated. "In 4Q23, revs declined 56% q/q while COGS only declined 47%, and this resulted in gross margins down ~17.5pp q/q to 3.3%,” he added.
BMO Capital Markets On SolarEdge Technologies
Analyst Ameet Thakkar reiterated a Market Perform rating while cutting the price target from $85 to $80.
SolarEdge’s first-quarter revenue and gross margin guidance came in "materially worse than we expected, and it's unclear if some of this is structural,” Thakkar wrote in a note.
"Cash burn resumed after prior call had suggested under-shipping would result in FCF generation,” the analyst stated. "Finally, it sounded to us that under-shipments may extend for most of 2024,” he ...