Solar

Solar Energy

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<p class="has-drop-cap">Earlier this month, SolarEdge (NASDAQ: $SEDG) <a href="https://tokenist.com/solar-stocks-plunge-after-solaredges-guidance-warns-of-low-demand/" rel="dofollow" class="deco-link">significantly cut</a> its revenue outlook for Q3 and raised concerns about weakening demand, leading to a major sell-off in solar stocks. These warnings came to fruition on November 1, when SolarEdge reported worse-than-expected third-quarter results and slashed Q4 guidance, plummeting the stock by 18% in the premarket.</p> 
<h3 id="solaredge-s-q4-revenue-guidance-misses-estimates-by-far">SolarEdge’s Q4 Revenue Guidance Misses Estimates By Far</h3> 
<p>The woes for the solar energy sector aren’t likely to end any time soon. On Wednesday, home solar system provider SolarEdge saw its stock price plummet after-hours trading after the company posted weak Q3 financial results. Further, SolarEdge issued a downbeat guidance for Q4, forcing investors to jump ship.</p> 
<p>Notably, the manufacturer of solar energy solutions reported a loss per share of 55 cents for the third quarter, narrower than the consensus estimates of 89 cents. Revenue came in at $725 million, well below the analysts’ expectations of $768 million.</p> 
<p>Looking ahead, the company expects revenue to be in the range of $300 million to $350 million in Q4, a far cry from the consensus projection of $688 million. For the overall solar sector, SolarEdge estimates revenue to land between $275 million and $320 million.&nbsp;&nbsp;</p> 
<p>Zvi Lando, the company’s CEO, said the Q3 results reflect “a slow market environment, which has resulted in high inventory of our products in the distribution channels — in particular in Europe.”</p> 
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<h3 id="demand-for-solar-energy-waning-amid-high-interest-rates">Demand for Solar Energy Waning Amid High Interest Rates</h3> 
<p>The disappointing quarterly results come just several weeks after SolarEdge warned that its Q3 earnings would miss expectations, sending the stock tumbling 30%. Also back then, Lando raised concerns about the sector’s waning demand, with installation rates for solar panels declining in what historically was a favorable quarter.&nbsp;</p> 
<p>The headwinds troubling the sector come mainly due to a high-interest rate environment, which has reduced the demand for solar energy, and unfavorable state solar policies. Last December, California <a aria-label="voted to trim (opens in a new tab)" href="https://www.cnbc.com/2022/12/15/california-lowers-solar-energy-incentives-for-homeowners.html" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">voted to trim</a> the compensation rate for the solar incentive program, with another cut possibly on the way.&nbsp;</p> 
<p>This, coupled with a <a href="https://tokenist.com/oil-drops-to-88-as-markets-brace-for-high-interest-rates-to-stay-longer/" rel="dofollow" class="deco-link">‘higher for longer’ rate narrative</a>, will likely continue to put pressure on the sector and, thereby, on stocks of solar energy companies. SolarEdge’s discouraging Q3 results caused a spillover effect on other <a href="https://tokenist.com/despite-the-green-energy-boom-solar-stocks-are-not-doing-great/" rel="dofollow" class="deco-link">solar stocks</a>, with Sunrun and Enphase Energy being down 9.8% and 4.1% in the premarket.&nbsp;</p> <iframe src="https://tokenist.substack.com/embed" width="100%" height="320" style="border:1px solid #EEE; background:white;" frameborder="0" scrolling="no"></iframe> 
<p><em><strong>Do you think this unfavorable environment for solar energy companies will persist? Let us know in the comments below.&nbsp;</strong></em></p> 
<p>The post <a rel="nofollow" href="https://tokenist.com/solar-stocks-bleed-amid-slowing-demand-and-high-interest-rates/">Solar Stocks Bleed Amid Slowing Demand and High Interest Rates</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

Solar Stocks Bleed Amid Slowing Demand and High Interest Rates

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