SolarEdge Technologies Stock: Sell On Weak Near-Term Prospects And Abrupt CEO Resignation

Summary:

  • SolarEdge Technologies reported Q2 2024 results largely in line with the disclosures made in conjunction with the company’s $300 million convertible notes offering in June.
  • While revenues were up by almost 30% sequentially, gross margin remained negative and the company continued to burn sizeable amounts of cash.
  • Cash flow remains a crucial issue as the company is facing a $347.5 million convertible notes maturity next year.
  • On the conference call, management projected further gradual improvement, but Monday’s abrupt CEO resignation adds more uncertainty to an already weak story.
  • Given these issues and with Q3 likely being a kitchen sink quarter in order to clean up things for the incoming CEO, I am reiterating my “Sell” rating on SEDG stock.
Back view of solar panel. Inverter to transform direct current into alternate

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Note:

I have covered SolarEdge Technologies, Inc. (NASDAQ:SEDG) or “SolarEdge” previously, so investors should view this as an update to my earlier article on the company.

SolarEdge Technologies Q2 Earnings & Q3 Guidance:

Earlier this month, SolarEdge Technologies reported Q2


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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