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Investing.com - Goldman Sachs has reiterated its Neutral rating and $27.00 price target on SolarEdge Technologies (NASDAQ:SEDG) following the company’s second-quarter 2025 results. According to InvestingPro data, the stock has shown significant volatility, with a 71% surge over the past six months despite challenging market conditions.
SolarEdge exceeded top and bottom-line expectations in Q2 2025, with performance driven by strong storage volumes and improved gross margins, according to Goldman Sachs. The company also provided guidance for Q3 2025 that suggests continued sequential growth in both revenue and margins. InvestingPro analysis shows the company maintains a healthy current ratio of 2.04, indicating strong short-term liquidity despite operational challenges.
The solar technology firm has revised its free cash flow outlook upward, now anticipating positive free cash flow for the year compared to its previous breakeven forecast. Goldman Sachs attributes this improvement to a more favorable tariff environment.
Despite these positive developments, Goldman Sachs notes that SolarEdge still faces challenges in normalizing channel inventories in Europe, which remains a weak market. The firm also points out that pricing pressures could persist as the company attempts to regain market share.
Goldman Sachs expressed concerns about SolarEdge’s growth potential in 2026, citing uncertainty around sustained margin expansion and the expected negative impact on the U.S. market when 25D tax credits expire, despite the company’s greater exposure to third-party owned systems.
In other recent news, SolarEdge Technologies reported second-quarter revenue that exceeded expectations, coming in at $289.41 million compared to the anticipated $273.63 million. This represents a 32% increase from the previous quarter. Despite the revenue beat, the company posted an adjusted loss of $0.81 per share, which was better than the analyst estimates of a $0.85 loss. GLJ Research noted that the revenue beat appears to be driven by temporary factors, as Deferred Revenue and Customer Deposits declined by $39.3 million quarter-over-quarter. Oppenheimer maintained its Perform rating on SolarEdge, citing meaningful progress in the company’s recovery efforts, with normalized channel inventory levels and a forecasted gross margin recovery by the third quarter of 2025. Barclays (LON:BARC) reiterated its Equalweight rating with a $29 price target, highlighting SolarEdge’s strong positioning to gain market share in the U.S. commercial and industrial solar sector. The investment bank pointed to domestic content requirements and foreign entity of concern restrictions as factors favoring SolarEdge’s market position.
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