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On Monday, TD Cowen reaffirmed its Hold rating on SolarEdge Technologies (NASDAQ:SEDG) stock with a steady price target of $11.00, as the stock trades near $14 after falling over 80% in the past year. According to InvestingPro data, seven analysts have recently revised their earnings downward, with price targets ranging from $9 to $40. The firm’s stance reflects concerns over the current market challenges faced by the solar technology company, including weakening demand in Europe and a less than robust first quarter forecast for 2025, as indicated by competitor Enphase.
SolarEdge has undertaken restructuring efforts in November and January to address these demand fluctuations. These initiatives aim to realign the company’s operations with the current market conditions and to maintain liquidity, as InvestingPro analysis shows the company is quickly burning through cash with a negative free cash flow of $602 million and concerning gross profit margins. The company’s ability to generate positive free cash flow in the first half of 2025 is a priority, especially with convertible notes worth $346 million maturing in September of the same year.
To bolster its financial position, SolarEdge has completed two tax credit sales since November and is exploring ways to liquidate inventory to reinforce its cash reserves. While the company maintains a healthy current ratio of 2.34 and operates with a moderate debt level, its strategy to manage inventory levels and resolve its convertible debt obligations may necessitate additional capital later in the year. This would support the launch of new products and capitalize on an anticipated recovery in demand.
Investors and analysts alike are looking ahead to SolarEdge’s fourth-quarter 2024 earnings report, scheduled for release on February 19th. The company will also conduct an earnings call at 8:00 AM ET on the same day to discuss the results and provide further insights into its financial health and strategic direction. For deeper insights into SolarEdge’s financial health and detailed analysis, access the comprehensive Pro Research Report available exclusively on InvestingPro, which includes 12 additional key insights about the company’s current situation.
In other recent news, Enphase Energy (NASDAQ:ENPH)’s first-quarter 2025 core revenues of $322 million, were in line with Citi’s estimates but fell short of the broader market consensus by 5%. Citi analysts, led by Vikram Bagri, adjusted the price target for Enphase Energy shares to $70.00, a decrease from the previous $72.00, while maintaining a Neutral stock rating. The California-based company faces additional headwinds, including tariffs on Chinese imports, but new product launches are expected to bolster revenues in the second half of 2025.
Meanwhile, SolarEdge Technologies and Summit Ridge Energy announced a partnership to supply inverters and Power Optimizers for SRE’s commercial solar installations across the United States. The projects are expected to surpass 100 megawatts. This collaboration is in line with SolarEdge’s plans to boost domestic manufacturing, resulting in approximately 1,750 new jobs in Tampa, Florida, and Austin, Texas.
On the other hand, Citi analyst Vikram Bagri downgraded SolarEdge Technologies’ stock from Neutral to Sell, citing a challenging year for the sector and increased competition. However, Goldman Sachs analyst Brian Lee increased the price target for SolarEdge shares to $21.00 from $19.00, while maintaining a Buy rating, based on several strategic initiatives by the company. Canaccord Genuity also increased its price target for SolarEdge to $18.00 from the previous $16.00, while keeping a Hold rating on the stock, expecting benefits in its earnings for the years 2025-2026 due to ongoing turnaround efforts. These are some of the recent developments in the sector.
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