Power-One (PWER) as expected posted strong quarterly results after the bell last night, but is plunging more than 20% this morning after the company posted weaker than expected revenue guidance for next quarter.  The company beat analyst estimates this quarter, reporting an adjusted EPS of .49/share ( vs estimate for .40) on revenues of $366 million (vs the estimate for $352 million.  As is often the case though, particularly with stocks that have had a big run, it’s all about guidance and it’s here the company disappointed.  Analysts were looking for guidance around the $313 million range, but the company is forecasting $260 – $290 million.  Granted, that would still be a significant jump over the year ago quarter when the company posted $152 million, but missing analyst expectations will often times hit a momentum stock.  The company mentioned that the weaker than expected 1st quarter will be due to seasonality, inclement weather in Europe, a reduction in feed-in-tariffs and excess inventory.

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"We gained market share and achieved record sales and net income in 2010, as both Renewable Energy Solutions and Power Solutions posted positive operating income in the fourth quarter," said Richard Thompson, Chief Executive Officer of Power-One. "With our focus on technology-leading products and customer service, Power-One is positioned for continued revenue and profitability growth in 2011."

In my opinion, I see opportunity with this sell off.  This is a leader in the inverter space and the valuation will look especially attractive in the $8 – $9 range.  With the stock taking out support of the 200 day moving average, it will likely need to test big support just above the $8 level.  That’s where I’d be interested in getting in.