SolarEdge Climbs 40% as Revenue Beat Prompts Short Covering

(Bloomberg) -- SolarEdge Technologies Inc. soared as much as 40% for the biggest intraday gain on record after the solar-equipment maker surpassed sales forecasts, triggering an apparent short-covering rally. 

The shares were up 28% at 11:23 a.m. in New York on Wednesday after earlier posting the steepest intraday advance since SolarEdge’s 2015 debut as a public company. 

Fourth-quarter revenue of $196.2 million was roughly 4% higher than the Bloomberg Consensus, “exceeding the Street’s very low expectations,” Guggenheim Partners analysts Hilary Cauley and Joseph Osha wrote in a note.

“The company also managed to generate positive free cash flow as SEDG continued to draw down inventory and trade receivables,” they added. 

Short interest in SolarEdge as a percentage of shares outstanding stood at more than 34% as of Tuesday, according to S&P Global data. That was the highest short-interest ratio in company history and comes about three months after SolarEdge took a $1 billion writedown in inventory and warned of negative or non-existent margins.

SolarEdge and the rest of the US rooftop-solar sector have struggled with sluggish sales as high interest rates made it more challenging for consumers to obtain financing. In addition, California, the industry’s biggest US market, slashed home-solar subsidies last year, contributing to a 19% decline in 2024 nationwide installations, according to BloombergNEF.

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