SolarEdge Technologies (SEDG) has found itself in the spotlight after releasing disappointing third-quarter earnings, prompting analysts to assess the company’s future trajectory. The news sent shockwaves through the market, with SEDG shares plummeting by nearly 10% on Friday.
Truist analyst Jordan Levy highlighted prior commentary from Enphase Energy (ENPH) regarding weakness in the European market, suggesting this might have foreshadowed SolarEdge’s underwhelming performance and guidance. SolarEdge projects revenue between $180 million and $200 million for the fourth quarter, falling short of the consensus estimate of $308.66 million.
Levy acknowledged the cyclical nature of market fluctuations and characterized SolarEdge as a ‘show-me story’ for the upcoming quarters. Despite the recent setbacks, Truist maintained a Hold rating on SEDG but lowered its price target from $20 to $15.
BMO Capital Markets analyst Ameet Thakkar echoed concerns about the European market, stating it has transitioned from ‘bad’ to ‘worse’. This sentiment led to a significant reduction in the price target on SEDG from $21 to $12. Thakkar, while retaining a Market Perform rating, expressed caution regarding SolarEdge’s management and urged for ‘more urgency’ in addressing cost structure and operational expenditures.
Thakkar pointed out that despite the over 80% decline in SEDG’s share price year-to-date and the high short interest, the company has recently taken more decisive action to clear its product channel in Europe. He awaits to see if these measures yield any positive outcomes.
As the market grapples with the implications of SolarEdge’s disappointing earnings, all eyes are on the company’s ability to navigate the challenges and restore investor confidence. The coming quarters will be crucial for determining whether SolarEdge can regain its footing and capitalize on the continued growth in solar demand.