SolarEdge Technologies faced a significant drop in its stock value after announcing a disappointing first-quarter guidance. The company expects revenues of $175 million to $215 million for the first three months of 2024, a figure well below Wall Street’s expectations of $406 million. Consequently, SolarEdge’s shares plummeted by as much as 18% in extended trading.

For the fourth quarter, SolarEdge reported an adjusted loss of 92 cents per share, lower than the $1.17 loss per share anticipated by Wall Street. Additionally, the company’s revenues for the quarter stood at $316 million, falling short of the expected $354 million. This marked a significant decline from the $890.7 million in sales reported in the same period in 2022.

The company’s CEO, Zvi Lando, attributed the challenges to a weaker market in the second half of 2023, influenced by high interest rates and lower prices, leading to increased inventory levels. SolarEdge primarily manufactures inverters that convert solar power into usable electricity.

Lando expressed optimism about the future, stating that the struggling European residential solar market is anticipated to bottom out in the first quarter and improve thereafter. However, he noted that the U.S. residential market may not see improvement until interest rates decrease.

This development has sparked interest and concern within the investment community, and the company’s next steps will be closely monitored as it navigates through these challenging market dynamics.