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On Friday, Northland analysts adjusted their stance on SolarEdge Technologies (NASDAQ:SEDG), downgrading the stock from Outperform to Market Perform while maintaining a price target of $15.50. The revision follows a remarkable 95.86% surge over the past six months, with the stock currently trading slightly above its InvestingPro Fair Value. The stock has shown strong momentum, gaining 53.24% year-to-date.
The analysts cited valuation concerns as the primary reason for the downgrade, noting that SolarEdge is currently navigating a turnaround amid a challenging macroeconomic landscape. According to InvestingPro data, the company faces significant headwinds with a -87.07% gross profit margin and a -59.03% revenue decline over the last twelve months. The uncertainty surrounding U.S. tax policy, particularly the transferability of 45x tax credits, and the lingering doubts over tariffs were highlighted as key factors influencing their decision.
Despite the reduced threat of tariffs, Northland analysts believe that risks remain. They have adjusted their gross margin (GM) assumptions for SolarEdge, now expecting that China tariffs will stand at approximately 30% with a possible variation of plus or minus 10%. This revised GM outlook reflects a more optimistic scenario than the previously assumed 145% tariff rate.
Maintaining their price target of $15.50, the analysts have shifted their rating to Market Perform, signalling a neutral perspective on the stock’s near-term trajectory. They emphasize that while the diminished tariff risk is a positive development, it has not entirely disappeared, warranting caution in their investment outlook for SolarEdge Technologies.
In other recent news, SolarEdge Technologies reported its first-quarter earnings for 2025, showing an adjusted EBITDA that slightly exceeded market consensus. The company also provided financial guidance for the second quarter. UBS analyst Jon Windham reacted by lowering the stock’s price target from $22 to $17, while maintaining a Neutral rating, citing the need for more consistent performance. Meanwhile, Canaccord Genuity analyst Austin Moeller raised the price target to $16.50, considering potential renegotiations of tariffs and SolarEdge’s market share gains in Europe.
Additionally, BMO Capital Markets reaffirmed its Underperform rating with a $14 price target, noting the company’s challenging financial outlook despite better-than-expected second-quarter guidance. Northland analyst Gus Richard upgraded SolarEdge to Market Perform from Underperform but reduced the price target to $12.50, highlighting the company’s positive cash flow and cost-cutting measures.
In product news, SolarEdge unveiled a solar-powered EV charging system at Intersolar Europe 2025, aimed at optimizing energy costs for businesses. The system is set for residential release by the end of the third quarter. This development aligns with the company’s strategy to integrate solar and storage solutions with EV charging infrastructure. These recent developments reflect SolarEdge’s ongoing efforts to navigate market challenges and expand its offerings in the smart energy sector.
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