Why Smart Energy Technology Company SolarEdge's Shares Are Tumbling Today

SolarEdge Technologies Inc SEDG shares are trading lower by over 24% after it reported weak preliminary Q3 FY23 results.

The company reduced its Q3 revenue outlook to $720 million-$730 million vs. $880 million-$920 million earlier and a consensus of $909.02 million.

Adjusted gross margin outlook is lowered to 20.1%-21.1% (from 28%- 31%) and adjusted operating income to $12 million to $31 million (from $115 million-$135 million earlier).

The company experienced considerable unexpected cancellations and pushouts of existing backlog from its European distributors in the latter half of Q3 FY23. 

The company noted that these cancellations and pushouts are due to higher-than-expected inventory in the channels and slower-than-expected installation rates.

Also, the company projects significantly lower revenues in Q4 2023 on continued inventory destocking process.

Zvi Lando, CEO, said, "The adjusted guidance is unrelated to the tragic events that have unfolded in Israel. While there has been some impact on daily routines at our headquarters, our offices and facilities are open worldwide, including in Israel, and we are manufacturing and providing customer support without interruption."

The company expects to report Q3 2023 results on November 1, 2023.

Price Action: SEDG shares are down 24.22% at $86.37 premarket on the last check Friday.

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