Shares of SolarEdge (SEDG) are on the rise on Tuesday morning after the company reported better than expected second quarter results and provided a stronger revenue forecast for the third quarter. Following the news, Citi analyst J.N. Lowe upgraded the stock to Buy on a faster than expected storage ramp, while his peer at Johnson Rice upgraded the shares to Accumulate.
QUARTERLY RESULTS: SolarEdge reported second quarter earnings of $1.28 and revenue of $480.1M, both better than the expected $1.12 and $454.69M, respectively. Additionally, the company reported 1.64 Gigawatts of inverters shipped. For the third quarter, SolarEdge sees revenue between $520M-$540M, with consensus at $504.68M, and non-GAAP gross margin within the range of 32% to 34%.
During its earnings conference call, the company also said that, "We are gradually ramping production of the battery and plan to ship between 25 megawatt hour to 30 megawatt hour of batteries in the third quarter. In order to meet the strong demand, we have signed an agreement with Samsung SDI for the supply of 1 gigawatt hour of cells to be provided in 2022. We are excited about this cooperation with the leading high quality cell manufacturer."
STORAGE RAMP: Citi analyst J.B. Lowe upgraded SolarEdge to Buy from Neutral with a price target of $360, up from $300, after the company announced its foray into the residential storage space "with a bang" after several quarters of delays. The supply agreement with Samsung SDI and anticipated capacity ramp to 250 MWh by mid-2022 exceeded his expectations and sets the stage for SolarEdge to become "a major player in the competitive residential solar space" much more quickly than he expected, the analyst told investors.
Johnson Rice analyst Martin Malloy also upgraded SolarEdge to Accumulate from Hold with a price target of $325, up from $290, after the company reported better than expected second quarter earnings per share and revenue above the top end of previously announced guidance. He noted that U.S. commercial revenue grew 80% sequentially in second quarter as SolarEdge successfully managed its supply chain challenges to meet strong growth in demand.
TARGETS UPPED FOLLOWING RESULTS: Goldman Sachs analyst Brian Lee raised the firm's price target on SolarEdge to $368 from $322 and reiterated a Buy rating on the shares after the company reported a second quarter beat to both revenue and earnings, with gross margins near the high end of the guidance range. Demand from both residential and commercial was strong, with channel inventory levels dropping below historical levels, the analyst noted. Lee also highlighted battery shipment ramping in the third quarter as expected.
Meanwhile, Piper Sandler analyst Kashy Harrison raised the firm's price target on SolarEdge to $351 from $342, keeping an Overweight rating on the shares. The analyst pointed out that the company reported better than expected second quarter results and benefited from the sales of power optimizers associated with its new commercial inverter. Further, SolarEdge delivered more favorable margins than expected across both solar/non-solar segment, Harrison added.
PRICE ACTION: In Tuesday morning trading, shares of SolarEdge have jumped about 15% to $295.84.
SolarEdge
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