Solar stocks have plunged to their lowest level in three years after solar product manufacturer SolarEdge (SEDG) warned that demand in Europe has significantly weakened.
The comments from SolarEdge’s chief executive officer hurt sentiment towards the renewable energy sector and has led to a 30% plunge in the share price of SolarEdge in premarket trading.
Other solar stocks are being dragged lower as well, with the Invesco Solar exchange-traded fund (TAN) falling nearly 10%, its lowest level since July 2020.
Other stocks in the solar sector also fell on the depressed outlook. Sunrun’s (RUN) stock dropped 8.1%, while Enphase Energy’s (ENPH) stock declined 15%.
The comments from SolarEdge’s CEO came as the company reported a miss on both its quarterly revenue and gross margins for this year’s third quarter.
SolarEdge CEO Zvi Lando cited “substantial unexpected cancellations and pushouts” of existing backlogs from the company’s European distributors as the reason for the company’s poor results.
SolarEdge designs and develops inverters, which convert the energy generated by a solar panel into electricity.
The solar sector was already struggling this year as rising interest rates has hurt the financing environment for U.S. solar installations.
Investment bank Goldman Sachs (GS) quickly double-downgraded SolarEdge’s stock following its Q3 results and CEO comments. Goldman lowered its rating on the stock to “neutral” from “buy” previously.
Prior to today (Oct. 20), SolarEdge’s stock had declined 42% over the last 12 months to trade at $113.98 U.S. per share.
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