Dimple Gosai, an analyst from Bank of America Securities, reiterated the Sell rating on SolarEdge Technologies (SEDG – Research Report). The associated price target is $44.00.
Dimple Gosai has given his Sell rating due to a combination of factors impacting SolarEdge Technologies. The company has underperformed in shipping, falling short by approximately $250 million in the first quarter, with a similar shortfall projected for the second quarter. There is an increased risk that these under-shipments could continue into 2025, which could further pressure gross margins that are already reliant on a volume recovery. Additionally, SolarEdge is facing accelerated destocking efforts and challenges within European markets, which reinforces the Underperform rating.
Furthermore, the report outlines concerns about the company’s gross margin trajectory, which was negatively affected by a shift in product mix, particularly the unexpected demand for single-phase batteries. Despite management’s expectations, there are uncertainties about achieving the targeted 30% gross margin range by year-end. In light of this, the report downgrades revenue estimates and gross margin expectations for the upcoming quarters, while also noting the significant inventory levels on hand, which could further complicate financial performance. These factors contribute to the lowered price objective from $54 to $44 and underscore the rationale behind the Sell rating.
In another report released yesterday, Goldman Sachs also reiterated a Sell rating on the stock with a $49.00 price target.
SEDG’s price has also changed moderately for the past six months – from $70.330 to $52.670, which is a -25.11% drop .
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SolarEdge Technologies (SEDG) Company Description:
SolarEdge Technologies, Inc. engages in the operation of inverter solution for the harvesting and managing of photovoltaic solar power. The company’s products include power optimizer, inverter and monitoring portal. It offers residential solutions, commercial solutions, and grid services. The company was founded by Guy Sella, Lior Handelsman, Yoav Galin, Meir Adest and Amir Fishelov in 2006 and is headquartered in Hod HaSharon, Israel.
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