SolarEdge Technologies (NASDAQ: SEDG) saw its share price plummet nearly 17% in premarket trading Wednesday after the company’s FQ4 revenue and FQ1 2024 guidance missed analysts’ expectations.

For the fiscal Q4, the smart energy technology company posted a loss per share of $0.92, which was narrower than the predicted loss of $1.34. Revenue came in at $316.04 million, missing the consensus projection of $324.2 million.

Moreover, the non-GAAP gross margin for the quarter stood at 3.3%, a significant decrease from 20.8% in the previous quarter and down from 30.2% in the same quarter the previous year.

Looking forward, SolarEdge's revenues to be in the range of $175 million to $215 million, substantially below the analyst estimates of $373.44 million.

The company forecasts that revenues from its solar segment will be between $160 million and $200 million.

The anticipated non-GAAP gross margin ranges from negative 3% to positive 1%, including an approximate 850 basis points impact from the net IRA manufacturing tax credit.

“Despite the challenges we faced in the second half of 2023, we concluded the year with $3.0 billion in revenue, just below 2022 levels,” said Zvi Lando, Chief Executive Officer of SolarEdge.

“The first half of 2023 included record installations and expectations for continued growth, with a shift in the second half of the year to a weaker market due to higher interest rates and lower power prices, which resulted in an inventory buildup that slowed our shipments.

In the wake of SEDG's poor performance and outlook, Citi analyst Vikram Bagri lowered FQ1 2024 estimates and reduced the target price on the stock from $89 to $83 per share.

"We had anticipated a rough 4Q and a challenging outlook for SEDG (see note and note). But, the company underperformed our expectations and some of the lowest buy side estimates we heard," Bagri wrote.

"We expect a negative reaction, which may reverse some of ENPH run up," he stated, and his prediction seemed to be accurate, as Enphase Energy (NASDAQ: ENPH) experienced a decline of over 4% in premarket trading.

SolarEdge's poor report negatively affected other solar stocks as well, including First Solar (NASDAQ: FSLR), and SunPower (NASDAQ: SPWR), among others.

By Vahid Karaahmetovic