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On Wednesday, Truist Securities analyst Jordan Levy updated his assessment of SolarEdge Technologies (NASDAQ:SEDG), increasing the price target from $14.00 to $18.00 while maintaining a Hold rating on the stock. Following the company’s recent financial report, SolarEdge shares experienced a significant rise, surging 27.39% in the past week alone, according to InvestingPro data. This remarkable performance has positioned the stock at $19.63, though still down 80% from its 52-week high of $84.69.
SolarEdge Technologies saw its shares jump 16% after the company reported a positive fourth-quarter free cash flow (FCF) and provided a strong first-quarter guide, which contrasted with the modest 0.2% gain in the S&P 500 index. The analyst noted that these results and the commitment to ongoing positive FCF generation should alleviate some of the most pessimistic near-term outlooks for the company.
Despite the positive movement, the analyst expressed concerns about the lack of detailed information regarding safe harbor contributions in the fourth quarter and first-quarter guidance. This, coupled with ongoing weakness in the European market, presents challenges in assessing the underlying demand for SolarEdge’s products. Additionally, the analyst highlighted the upcoming 2025 debt maturity as a potential issue that could continue to affect the stock until SolarEdge addresses it through retirement or refinancing.
In light of these factors, Truist Securities adjusted their estimates and raised the price target to $18. However, they reiterated a Hold rating on SolarEdge Technologies shares, suggesting a cautious stance on the company’s stock despite the recent positive financial developments.
In other recent news, SolarEdge Technologies reported fourth-quarter revenues of $196.2 million, slightly above the consensus estimate of $194.95 million, despite a 17% decrease from the previous quarter. The company faced a significant earnings per share (EPS) shortfall, reporting -$3.52 against an expected -$1.66, mainly due to asset write-downs and impairments totaling $138 million. SolarEdge’s outlook for the first quarter of 2025 suggests revenues between $195 million and $215 million, aligning with or slightly exceeding the consensus estimate of $207.9 million. The company also forecasts positive free cash flow throughout 2025, which has been positively received by analysts such as those from Oppenheimer and Truist Securities.
JPMorgan raised its price target for SolarEdge to $24, reflecting confidence in the company’s improved cash flow and its potential to enhance investor sentiment. Meanwhile, Citi maintained a Sell rating with a $9 target, highlighting concerns over the company’s inventory levels and financial restatements. Oppenheimer maintained a Perform rating, noting the challenges SolarEdge faces in recovering profit margins and clearing inventories in Europe. Despite these challenges, SolarEdge is optimistic about its future, with plans to launch new products and focus on operational efficiency. The company is also ramping up U.S. manufacturing, which could provide a competitive edge in the domestic market.
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