SolarEdge Technologies will lay off 400 employees, the solar panel inverter company said Monday. SolarEdge stock fell sharply, with other solar stocks sliding as well.
In a letter to employees, Chief Executive Zvi Lando said the company must take "meaningful measures to ensure our financial stability and restore profitability" as revenues decline.
"The downturn of the market at the end of 2023 and beginning of 2024 had led to an accumulation of excess inventory in our distribution channels," Lando said in the letter. "We know that as inventory channels clear, our sales volumes are lower than the rate of installations and that this clearing process will take time."
Lando added that solar installation rates are increasing "slower than expected" in Europe while there is "some slight growth" in North American installs.
This is the second round of layoffs for SolarEdge in the past seven months. In January, the company announced layoffs for 900 jobs, or 16% of its workforce at the time.
Solar Stocks Fall With SolarEdge
On the stock market today, SolarEdge lost 15% to close 27.37. SolarEdge stock is down 70% this year and off just under 90% over the past 12 months.
Other solar stocks fell as well. SolarEdge rival Enphase Energy lost 5% to close at 113.06. Residential solar company Sunrun fell 9% to 15.66. Panel manufacturer First Solar is down 8.5% at 213.42 in recent action.
Meanwhile, The Invesco Solar ETF fell 5.8% to 41.90.
Solar stocks have struggled for over a year now. The Invesco Solar ETF is down 43% over the past 12 months. Rising interest rates and inflation, among other factors, have made projects more difficult to finance and have cut into earnings.
Solar stocks also slumped following a weak showing from President Joe Biden during the first presidential debate in late June. Investors appeared concerned that a return to the White House for President Donald Trump would threaten subsidies for renewables in the Inflation Reduction Act signed by Biden.
The 29-stock solar energy group tracked by IBD is down about 7% this year. For most of 2023, the group ranked near the bottom of the 197 industry categories tracked by Investor's Business Daily. But the group's ranking has improved so far this year, sitting at 58 out of 197 as of Monday.
According to IBD Stock Checkup, First Solar is the top-rated stock in the solar energy group, with a Composite Rating of 97 out of 99.
