On Tuesday, Goldman Sachs upgraded SolarEdge Technologies (NASDAQ:SEDG), a company specializing in solar energy solutions, from a Sell to a Buy rating. This notable shift in position comes with a new 12-month forward price target of $19 per share, a significant divergence from GLJ Research's maintained Sell rating and year-end 2025 price target of $3.90 per share.
The stock, currently trading at $15.16, has experienced an 87% decline over the past year, according to InvestingPro data, with analyst targets ranging widely from $7 to $100.
The upgrade by Goldman Sachs is rooted in the belief that concerns over SolarEdge's ability to address its $347.5 million convertible bond, due on September 15, 2025, are misplaced. Goldman Sachs suggests that the company is well-positioned to manage this financial obligation. InvestingPro analysis indicates the company operates with moderate debt levels and maintains liquid assets exceeding short-term obligations, with a current ratio of 2.34.
GLJ Research, on the other hand, presents a contrasting viewpoint. The firm argues that investors' worries about SolarEdge's future in 2025 are not centered on the convertible bond issue. GLJ Research's analysis and recent discussions with investors who are both long and short on SEDG's stock have led them to believe that there is a consensus that SolarEdge will not face difficulties in dealing with the maturing bond next year in the third quarter of 2025.
According to GLJ Research, there is a general agreement among investors that SolarEdge is likely to address its convertible bond without issue. Despite Goldman Sachs' upgraded rating and higher price target, GLJ Research stands by its own analysis and price expectations for SolarEdge Technologies.
In other recent news, SolarEdge Technologies has seen substantial changes with a significant shortfall in third-quarter earnings and a new CEO appointment. The company reported earnings per share (EPS) of -$15.33, markedly lower than the forecasted -$1.65, and total revenues of $261 million. Amid these developments, Shuki Nir, the former Chief Marketing Officer, has stepped in as the new CEO, succeeding interim CEO Ronen Faier.
Analysts from Goldman Sachs, Deutsche Bank (ETR:DBKGn), Canaccord Genuity, BMO Capital, and Oppenheimer have provided their ratings on the company, with Goldman Sachs raising SolarEdge to buy and the others maintaining their hold or market perform ratings.
Goldman Sachs sees 2025 as a pivotal year for SolarEdge, despite anticipating continued volatility. They predict a negative EPS for 2025 but anticipate a positive earnings quarter in 4Q25 and substantial growth acceleration for 2026.
SolarEdge is expected to enter a product redesign phase and introduce new products to the market by late 2025 or early 2026. The company has provided revenue guidance for Q4 2024 between $180 million and $200 million and aims to return to positive free cash flow by the first half of 2025.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.