JPMorgan raises SolarEdge stock price target to $24

On Wednesday, JPMorgan analyst Mark Strouse increased the price target on SolarEdge Technologies (NASDAQ:SEDG) to $24.00, up from $19.00, while keeping an Overweight rating on the shares. The stock, currently trading at $21.25, has shown remarkable strength with a 27.4% gain over the past week, according to InvestingPro data. The adjustment follows SolarEdge’s fourth-quarter earnings report, which revealed earnings per share (EPS) that fell short of projections due to write-downs and impairment charges. InvestingPro analysis shows the company’s financial health remains challenged, with a negative EBITDA of $1.25 billion and concerning gross profit margins of -69.3%. However, the company’s revenue and free cash flow (FCF) were reported to be stronger than anticipated.

SolarEdge’s first-quarter margin guidance exceeded expectations, with revenue projections roughly in line. The company also anticipates positive FCF in the first quarter and throughout the fiscal year 2025. While Strouse noted that the demand in the end-market continues to face challenges and that the company’s disclosures did not fully clarify the benefits from safe harbor activities and tax credit transfers, he expressed belief that the shift to positive FCF should alleviate concerns related to the September 2025 convertible debt maturity.

Strouse mentioned that revenue estimates for SolarEdge are largely unchanged, but adjustments have been made to margin and cash flow estimates. The new year-end 2025 price target reflects these revised estimates and an increased assigned multiple. This adjustment is based on the expectation that improved cash flow will enhance investor sentiment toward SolarEdge Technologies. For deeper insights into SolarEdge’s valuation and 16 additional key ProTips, including detailed cash flow analysis, visit InvestingPro, where you’ll find comprehensive research reports that transform complex financial data into actionable intelligence.

In his commentary, Strouse emphasized the significance of SolarEdge’s positive free cash flow, suggesting that it could play a role in improving the perception of the stock amongst investors. The Overweight rating has been maintained, indicating JPMorgan’s continued confidence in the stock’s performance.

In other recent news, SolarEdge Technologies reported fourth-quarter revenues of $196.2 million, slightly surpassing analyst expectations of $194.95 million. Despite this revenue beat, the company’s earnings per share (EPS) came in at -$3.52, missing the forecast of -$1.66 due to asset write-downs and impairments totaling $138 million. The company has provided a positive outlook for the first quarter of 2025, projecting revenues between $195 million and $215 million, aligning with or slightly above the consensus estimate of $207.9 million. Analysts from Oppenheimer and Truist Securities have maintained their ratings on the company, citing the importance of positive free cash flow and better-than-expected revenue performance. SolarEdge is also focusing on launching new products, including the NexSys line, in late 2025 and is working on cost-cutting and operational efficiency improvements. The company shipped 895 megawatts in the fourth quarter, with a significant portion directed to commercial and utility sectors. SolarEdge’s CEO, Shuki Nir, emphasized the company’s commitment to innovation and financial stability, as the firm aims to improve gross margins and reduce costs.

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