Why Solar Power Stocks Flamed Out on Friday

Bad news that led to a massive sell-off in shares of solar power inverter manufacturer SolarEdge (NASDAQ: SEDG) also burned investors in related solar power stocks Friday. Through 11:35 a.m., solar power installers (NASDAQ: RUN), Sunnova Energy International (NYSE: NOVA), and SunPower (NASDAQ: SPWR) were down 9.4%, 11.1%, and 13.4%, respectively.

The stocks' plunges all started when SolarEdge released preliminary numbers for the third quarter on Thursday evening, warning that "substantial unexpected cancellations and pushouts of existing backlog from our European distributors" will cause the company to miss its prior sales guidance by as much as $200 million -- a miss as big as 22% -- with weak gross margins and an operating loss to boot.  

This is miserable news for SolarEdge investors, no doubt, exacerbating losses in the stock earlier in the year, and returning SolarEdge stock to price levels last seen in the early months of the pandemic. But things could get messy for Sunrun, Sunnova, and SunPower, too.  

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Source Fool.com