Here's Why SolarEdge Stock Sank This Week

Solar microinverter manufacturer SolarEdge Technologies (NASDAQ: SEDG) reported a new record for sales in a single quarter Monday evening, sending its stock higher at first -- but not all the news was great. Sales surged 62% in the first quarter of fiscal 2022 when compared to Q1 2021. And yet, the deeper you dig into this earnings report, the worse the news gets -- and this probably explains why the stock couldn't hold onto its gains this week.

Take "earnings," for example. SolarEdge boasted that in tandem with big sales gains, "non-GAAP net diluted EPS" grew 22% in comparison with last year, to $1.20 per share. But when calculated according to generally accepted accounting principles (GAAP), SolarEdge's earnings were much weaker than that -- just half non-GAAP earnings in fact, or $0.60 per share. And granted, that was better than last year, but it was still only a 9% improvement over last year's Q1.

That's a whole lot less profit than you'd probably expect a company to earn after reporting "record" sales and a 62% surge in revenue.

Source Fool.com