SolarEdge stock target raised to $19 by Canaccord Genuity

Published 20/02/2025, 13:32
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On Thursday, Canaccord Genuity analyst Austin Moeller adjusted the price target for SolarEdge Technologies (NASDAQ:SEDG) to $19.00, up from the previous target of $18.00, while reiterating a Hold rating on the company’s shares. The adjustment follows a remarkable 32% surge in the stock price over the past week, though InvestingPro data indicates the company is currently trading above its Fair Value. Moeller’s decision comes in response to SolarEdge’s recent performance, which he views as a positive movement towards the company’s future profitability and the generation of meaningful annual free cash flow (FCF), despite the company’s concerning 70% year-over-year revenue decline.

The analyst noted that despite SolarEdge’s progress, the company faces challenges in the European market, which accounted for 64% of its 2023 revenues but only 24% in the fourth quarter of 2024. The slower demand for solar installations in Europe is attributed to lower electricity rates and stiff competition from less expensive Chinese products, such as inverters, optimizers, and batteries. These factors have impacted SolarEdge’s ability to clear out inventory with installers, contributing to concerning negative gross margins of -95.6%. InvestingPro analysis reveals 17 additional key insights about SolarEdge’s financial health and market position, available exclusively to subscribers.

Moeller also highlighted the upcoming second quarter of 2025 results, which could serve as a turning point for SolarEdge if the European sales channel improves as anticipated. This potential uplift in the European market is seen as an opportunity for the company to experience sustained multiple expansion.

Furthermore, the analyst pointed out that the United States market, while offering higher product pricing compared to Europe, is not without its risks. With expectations of fewer U.S. rate cuts than initially forecasted over the next year, SolarEdge’s U.S. demand remains vulnerable to political uncertainties.

In summary, Canaccord Genuity maintains a cautious but hopeful outlook on SolarEdge Technologies, acknowledging recent advancements while also recognizing the hurdles the company faces in its key markets. The modest increase in the price target reflects a balanced view of these factors.

In other recent news, SolarEdge Technologies has been the focus of multiple analyst assessments following its latest financial updates. Morgan Stanley (NYSE:MS) upgraded SolarEdge’s stock rating from Underweight to Equalweight, raising the price target to $18.00 due to improved financial stability and cash flow outlook. Meanwhile, BMO Capital Markets downgraded the stock from Market Perform to Underperform, although they increased the price target to $15.00, citing concerns about long-term revenue and cash flow growth despite the company’s recent financial maneuvers. Truist Securities maintained a Hold rating but raised the price target to $18.00, acknowledging the company’s positive free cash flow guidance and a strong first-quarter outlook, while expressing concerns about market demand and upcoming debt maturity.

Citi analyst Vikram Bagri held a Sell rating with a price target of $9.00, noting slight revenue improvements and favorable margin outlooks but highlighting challenges such as inventory impairment and financial restatements. Oppenheimer maintained a Perform rating, recognizing better-than-expected financial results and the company’s navigation through challenging cycles, yet expressing caution over profit margins and European market conditions. These varied assessments reflect differing perspectives on SolarEdge’s financial health and market prospects, with analysts emphasizing the importance of monitoring the company’s strategic efforts and external market factors.

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