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On Thursday, SolarEdge Technologies stock was downgraded by Northland analysts from ’Market Perform’ to ’Underperform’, alongside a significant reduction in the price target to $15.00 from a previous level. The downgrade came in response to the company’s latest earnings report, which revealed SolarEdge is only marginally cash flow positive. The firm is currently engaged in cost-cutting measures and divesting from unsuccessful acquisitions. Financial data from InvestingPro shows the company’s challenging position, with negative free cash flow of -$602 million and a concerning gross profit margin of -95.6% in the last twelve months.
According to Northland, SolarEdge is lagging in several critical areas, including the development of new products, customer service, and reliability. These issues are expected to require time to address and rectify. The analysts expressed concerns over the company’s transparency, suggesting that there have been no significant changes in this aspect of SolarEdge’s operations.
The report further indicated that by the end of the calendar year 2025, SolarEdge is projected to have approximately $300 million in net cash. This financial forecast factors into the analysts’ outlook and their decision to set a lower price target for the company’s stock. InvestingPro subscribers have access to 17 additional key insights about SolarEdge, including detailed analysis of its financial health and growth prospects. Get the full picture with InvestingPro’s comprehensive research report, part of its coverage of over 1,400 US stocks.
Shares of SolarEdge Technologies (NASDAQ:SEDG) have been impacted by the Northland’s assessment and the concerns raised regarding the company’s current position and future prospects. The new ’Underperform’ rating reflects the analysts’ viewpoint that the stock may not perform as well as the overall market in the near future. According to InvestingPro analysis, the stock appears overvalued at current levels, with analyst targets ranging from $9 to $40 per share.
In other recent news, SolarEdge Technologies has seen various updates from analysts concerning its financial outlook and stock ratings. Canaccord Genuity raised its price target for SolarEdge to $19 while maintaining a Hold rating, noting the company’s progress toward profitability despite challenges in the European market. Morgan Stanley (NYSE:MS) upgraded SolarEdge’s stock rating from Underweight to Equalweight, raising the price target to $18 due to an improved cash flow outlook, although acknowledging ongoing market challenges. Meanwhile, BMO Capital Markets downgraded SolarEdge from Market Perform to Underperform, despite increasing the price target to $15, citing concerns about the company’s core business performance against fiscal year 2025 forecasts.
Truist Securities also adjusted its view, raising the price target to $18 and maintaining a Hold rating, following SolarEdge’s positive fourth-quarter free cash flow and first-quarter guidance. However, Truist expressed concerns about the lack of detailed information on certain financial contributions and the upcoming 2025 debt maturity. On a different note, Citi maintained a Sell rating with a $9 target, pointing out that despite a slight improvement in top-line revenue and margins, the company faces inventory challenges and the need to restate financials after a customer contract amendment. These developments reflect a mixed outlook for SolarEdge, as analysts weigh the company’s financial strategies and market conditions.
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