SolarEdge stock surges despite steep loss, as cash flow turns positive
The renewable energy company beats revenue forecasts and signals a shift toward profitability.
Despite reporting a per-share loss that was double analysts' expectations, shares of renewable energy company SolarEdge are surging on Wall Street following the release of its latest financial results. The report suggests a potential positive shift for the company.
One indicator of recovery is SolarEdge’s transition to positive cash flow. In the fourth quarter of 2024, the company recorded a positive cash flow of $25.5 million, compared to a negative cash flow of $180 million in the same quarter of 2023.
According to Oppenheimer analyst Sergey Vastchenok: “Cash generation and meeting expectations—both in actual results and in the forecast—provide a reassuring signal to investors. Of course, SolarEdge’s management, led by the new CEO, still has significant work to do in stabilizing operations, but we are already seeing signs of change. The story of SolarEdge is no longer about growth, but about execution and efficiency to restore cash flow and profitability in the future.”
“There are exciting opportunities ahead for SolarEdge,” said Shuki Nir, CEO of SolarEdge. “We are just getting started on our turnaround story. The return to positive free cash flow generation in Q4 is a solid first step, and we expect to be free cash flow positive in Q1 2025 and for the full year 2025.”
Nir assumed the CEO role in December, having previously served as SolarEdge’s chief marketing officer. His appointment was part of a broader leadership restructuring aimed at addressing the company’s losses over the past two years, primarily caused by an inventory crisis.
Nir succeeded Ronen Faier, who had served as interim CEO following the departure of Zvi Lando in August. However, Lando remains on the company’s board. Faier, who had been SolarEdge’s CFO for 14 years, has since left the company.
Over the past year, SolarEdge has implemented multiple cost-cutting measures, including shutting down its energy storage division in South Korea. In the fourth quarter, the company reduced operating expenses by $10 million, bringing them down to $106 million.
Total revenue for the quarter was $196 million, approximately $2 million above analysts’ forecasts, but a 17% decline compared to the same period last year. Revenue from SolarEdge’s core solar segment was $189 million, reflecting a 15% year-over-year decline.
The company reported a fourth-quarter loss per share of $3.52, significantly higher than analysts' expectations of $1.66.
For the first quarter of 2025, SolarEdge projects revenue in the range of $195 million to $215 million and a non-GAAP operating profit margin of 6% to 10%. The company also expects operating expenses to fall within the range of $98 million to $103 million.
