Why SolarEdge (SEDG) Shares Are Sliding Today

What Happened?

Shares of solar power systems company SolarEdge (NASDAQ:SEDG) fell 22.3% in the morning session after the company reported underwhelming third-quarter earnings. Its revenue guidance for the next quarter missed, and its revenue fell short of Wall Street's estimates. Notably, the company wrote down $612 million in inventory, reflecting lowered demand, particularly in Europe. As a result, SolarEdge implemented price cuts and promotional discounts to compete in this market, which is likely to result in a shortfall in its margins. Lastly, the company called out seasonal weakness heading into the winter. Overall, this was a challenging quarter for the business, with little reasons for investors to stay positive.

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What The Market Is Telling Us

SolarEdge’s shares are extremely volatile and have had 65 moves greater than 5% over the last year. But moves this big are rare even for SolarEdge and indicate this news significantly impacted the market’s perception of the business.

SolarEdge is down 83.8% since the beginning of the year, and at $14.83 per share, it is trading 85.5% below its 52-week high of $102.24 from December 2023. Investors who bought $1,000 worth of SolarEdge’s shares 5 years ago would now be looking at an investment worth $185.61.

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