SolarEdge sinks 19% as weak margins, forex rates weigh on Q2 results (NASDAQ:SEDG)

SolarEdge Technologies (NASDAQ:SEDG) is Wednesday’s biggest loser on the Dow Jones average, -19.1%, after reporting mixed Q2 results that analysts said were “messy,” with weak margins and an outsized effect from foreign currency translations, Bloomberg reports.

The company also guided for Q3 revenues of $810M-$840M, in line with $821M analyst consensus estimate.

FX “took a bigger bite” than expected, and SolarEdge (SEDG) shares likely will “remain in the penalty box” until margins inflect higher, Cowen analyst Jeffrey Osborne said, according to Bloomberg.

Q2 was more challenging than expected, and targeted inverter margins are not likely to improve until euro-to-dollar forex rates normalize, with the company not raising prices to mitigate the impact, Piper Sandler’s Kashy Harrison said.

“While we continue to face growing supply chain challenges, some related to our rapid growth in an environment of component shortages, and macroeconomic trends as a result of our global footprint, we continue to support our customers while building the infrastructure for sustainable growth,” CEO Zvi Lando said.

SolarEdge (SEDG) and other solar stocks had been surging since last week when Senator Joe Manchin and Majority Leader Chuck Schumer announced a surprise deal that includes $369B for “energy and climate change.”