The global shift towards sustainability and the burgeoning green energy revolution is undeniably reshaping the world’s energy landscape. With governments worldwide rallying to slash global greenhouse gas emissions and pivot towards renewable energy sources, the future seems bright for green energy investments. Amid this transformative era, identifying green energy stocks to sell becomes a pivotal strategy for investors navigating this burgeoning sector. While the promise of green energy stocks is undeniable, not all shares are poised for prosperity.
Indeed, a discerning eye is essential, as the market’s enthusiasm often outpaces the financial realities of certain ventures. With governments worldwide rallying to foster a sustainable energy future, the investment landscape is ripe with both opportunities and pitfalls.
Therefore, we spotlight three green energy stocks currently waving red flags within this context of change and challenge. These entities, amidst the fervor for green innovation, have signaled a ‘sell’ due to their lackluster performance.
SolarEdge Technologies (SEDG)
SolarEdge Technologies (NASDAQ:SEDG), renowned for enhancing solar panel efficiency through its power optimizers and inverters, has encountered a stormy period. The company’s stock plummeted 76% over the past year, compelled by a challenging market landscape to lay off 16% of its workforce in a bid to streamline operations. This strategic contraction underscores SolarEdge’s battle against softened demand for its solar inverters and regulatory shifts in the U.S. that have further strained the solar market.
Recent financial disclosures further paint a grim picture, with Non-GAAP earnings per share falling short by 21 cents and revenue tumbling 13.3% year-over-year. The operational recalibration has yet to stem the tide, as evidenced by an 88% dip in non-GAAP operating income from the previous year.
Looking ahead, SolarEdge’s fourth-quarter revenue forecast signals a stark contraction, anticipating figures of $300 million to $350 million, significantly below analyst expectations of $715 million. This revision reflects the acute challenges SolarEdge faces amidst a recalibrating solar market and evolving economic conditions.
Plug Power’s (NASDAQ:PLUG) journey on Wall Street has been fraught with hurdles, right from its IPO marred by a class-action lawsuit alleging investor misinformation to recent legal woes resulting in a $1.25 million SEC fine due to accounting discrepancies. This backdrop has contributed to a steep 73.67% plunge in its stock over the past year.
In the latest quarter, Plug Power’s financials failed to meet expectations, with revenue falling short by $23.02 million and a GAAP earnings per share deficit of 47 cents, 16 cents below forecasts. These figures indicate a larger-than-anticipated quarterly loss and revenues that didn’t hit the mark.
Furthermore, the company attributed its underwhelming performance to “unprecedented supply challenges” in the North American hydrogen market, including significant shortages and operational inefficiencies across hydrogen facilities. This situation has adversely affected deployment schedules, fuel prices, and the reliability of service infrastructure, leading Quant analysts to label it a ‘strong sell.’
Sunrun (NASDAQ:RUN), a front-runner in the U.S. residential solar market, finds itself navigating through a turbulent phase. The company’s valuation has plummeted by 44% in the past year, exacerbated by a hefty $1.2 billion charge stemming from its acquisition of Vivint Solar, signaling a significant devaluation.
Additionally, Sunrun is currently under the scrutiny of an IRS audit, with allegations from Wall Street analyst Gordon Johnson of a potential $40 billion in undeserved tax subsidies, dubbing it possibly “the biggest tax fraud in the history of the U.S.”
The financial turbulence is mirrored in Sunrun’s recent quarterly performance, where revenues dipped by 10.8% year-over-year, falling short of market expectations by $11.9 million. Moreover, the company’s earnings per share registered a substantial miss, with a GAAP Actual of negative $4.92, veering off from projections by $4.82. This underperformance has led SA analysts to cast RUN as a green energy stock to sell, signaling a cautious or bearish outlook for the company’s near-term prospects.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines