Why SolarEdge Stock Crashed After Earnings
Key Points
SolarEdge beat on earnings last night -- or did it?
Non-GAAP results show a surprise profit, but under GAAP accounting, SolarEdge is still losing money.
- 10 stocks we like better than SolarEdge Technologies ›
SolarEdge Technologies (NASDAQ: SEDG) stock, the Israeli maker of power inverters for solar panels, short-circuited despite delivering a strong earnings beat last night.
Heading into the report, analysts expected SolarEdge to report a loss of $0.02 per share, but the company delivered a pleasant surprise instead: a $0.05 per share profit. Sales likewise didn't disappoint, with SolarEdge edging past a $342 million forecast to report sales of $346.2 million.
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Despite all this good news, SolarEdge stock sold off today and is down 24.6% through 12:45 p.m. ET. Why?
Image source: Getty Images.
SolarEdge Q2 earnings by the numbers
SolarEdge grew its sales 20% year over year in Q2 -- that's the good news. The bad news is that SolarEdge's apparent "profit" was an illusion. While non-GAAP, pro forma earnings were positive for the quarter, earnings calculated under generally accepted accounting principles (GAAP) were still deeply negative -- $0.50 per share.
That was still better than the $0.95 SolarEdge lost in Q1 2026, and much better than the $2.13 it lost in Q2 2025. But a loss is still a loss -- and the fact remains that SolarEdge lost money in Q2.
What's next for SolarEdge stock?
SolarEdge is trying to turn things around, and CEO Shuki Nir says it's making progress as solar demand remains strong in Europe, and is improving in the commercial and industrial sectors of the U.S. Just don't expect the turnaround to happen immediately.
Demand remains weak in the U.S. residential sector, and SolarEdge forecasts Q3 2026 sales to fall sequentially, to $310 million to $340 million. That whole range is below Q2 sales -- and way below Wall Street forecasts for more than $370 million in Q3 sales.
Earnings "beat" or no, with negative GAAP profit and sales still weak, SolarEdge remains a "sell" for me, for now.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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