SolarEdge Technologies (NASDAQ:SEDG) shares plunged about 25% in pre-market Friday trade after the solar company reported preliminary financial results for Q3.

The revenue for the quarter is now seen at $720-730 million, down from the previous expectation of $880-920M, compared to the consensus estimate of $909.02M.

“During the second part of the third quarter of 2023, we experienced substantial unexpected cancellations and pushouts of existing backlog from our European distributors. We attribute these cancellations and pushouts to higher than expected inventory in the channels and slower than expected installation rates,” said CEO Zvi Lando.

Management also expects significantly lower revenues in Q4 as the inventory destocking process continues.

At least, three analysts downgraded the stock in response to the preliminary results. Goldman Sachs analysts moved to Neutral from Buy, citing worsening visibility.

“After a second straight disappointing quarter of results/guidance, we find it hard to defend the stock: we underestimated the effects of the combination of ongoing inventory, end market demand, and now margin issues that are likely to serve as headwinds for the stock for the foreseeable future given what appears to be a significant deterioration in visibility,” the analysts said.

Similarly, Roth MKM analysts moved to Neutral as well.

“We expect EU/US resi challenges to continue ahead. Combine this with FX headwinds and the Israeli conflict, we are stepping aside and downgrading to Neutral from Buy until visibility improves,” they wrote in a downgrade note.

Additional reporting by Senad Karaahmetovic