'Renewable Massacre': SolarEdge Melts Down After Weak Guidance

This week, the renewable energy industry has been in full collapse mode. Orsted A/S - the world's biggest offshore wind farm developer - abandoned two major US project due to supply chain issues and interest rates. Now, solar stocks have been hammered in US premarket trade on Thursday, after solar equipment makers SolarEdge & Sunrun announced dismal guidance due to waning demand.

SolarEdge Technologies is the first company we'll look at. According to Bloomberg Consensus Data, the company expects current quarter revenues between $300 million and $350 million. This is far below analyst estimates of $718.9 millions.

Fourth Quarter Forecast

Estimated revenue of $718.9 millions (Bloomberg Consensus).

Gross margins are adjusted to between 5% and 8%

Last month, SolarEdge

Adjusted its revenue forecast

For the third quarter, Citing high inventory levels and sliding installation. The situation led to significant order cancellations as well as a clearing of orders backlogged by its European distributors.

Third Quarter Results

Adjusted loss per share 55c vs. EPS 91c y/y, estimate EPS 95c

Revenue $725.3 million, -13% y/y, estimate $732.6 million

Gross Profit $142.8 Million

Gross margin 19,7% vs. 26,5% y/y

Operating expense $159.5 million, +47% y/y, estimate $130.3 million

Estimated sales and marketing expenses $43.8 million, down -5.6% year-on-year, $40.4 million

R&D expenses $80.1 million, estimate $82.1 million

Adjusted net loss $31.0 million, estimate profit $47.1 million

SolarEdge's CEO Zvi Lando stated in a statement on Wednesday: "The third quarter results fell short of expectations, and reflect a sluggish market environment."

SolarEdge shares fell 20% in premarket trading.

SolarEdge short interest is on the rise.

SunPower Corp.'s shares have also fallen in the premarket (4%) since it cut its full-year earnings guidance after falling short of analyst expectations due to a softer demand for panels.

Peter Faricy, CEO of Faricy Group, said in a conference calling that "we are currently facing stormy waters". Another 'green company' is affected by the high interest rate environment.

And Sunrun's shares fell 9% on premarket after the company reported revenue for the third-quarter that was below the average analyst forecast.

While President Biden’s 'wind Revolution' is underway

Blown down

Orsted A/S announced this week that two major US projects had been abandoned due to the impact of supply chain and interest rates. If interest rates remain high, all those decarbonization goals won't be met.