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Why SolarEdge Stock Is Surging This Week
SEDGSolarEdge(SEDG) The Motley Fool·2025-02-23 00:41

Core Insights - SolarEdge stock experienced a strong bullish momentum, gaining 7.7% during the week despite a broader market downturn, with the S&P 500 and Nasdaq Composite down 1.7% and 2.3% respectively [1] - The company's fourth-quarter earnings report exceeded sales expectations, leading to a rise in valuation and positive analyst coverage [2] Financial Performance - SolarEdge reported a non-GAAP loss per share of 3.52onrevenueof3.52 on revenue of 196.2 million, which was approximately 7millionaboveWallStreet′saverageestimateforsales,althoughtheadjustedlosspersharewas7 million above Wall Street's average estimate for sales, although the adjusted loss per share was 1.86 higher than forecasted [3] - Revenue declined by 17% year-over-year, but the company generated 26millioninfreecashflow,significantlysurpassingmarketexpectations[4]AnalystReactions−FollowingtheQ4report,analystsraisedpricetargetsforSolarEdge,withUBSincreasingitsone−yeartargetfrom26 million in free cash flow, significantly surpassing market expectations [4] Analyst Reactions - Following the Q4 report, analysts raised price targets for SolarEdge, with UBS increasing its one-year target from 18 to 22pershare,citingfavorabledemandindicatorsandcost−cuttinginitiatives[5]−Despitethepricetargetincrease,UBSmaintainedaneutralrating,highlightingchallengessuchasaninventoryglutinEuropeandTesla′smarketsharegainsinCalifornia[6]FutureGuidance−Forthefirstquarter,SolarEdgeisguidingforsalesbetween22 per share, citing favorable demand indicators and cost-cutting initiatives [5] - Despite the price target increase, UBS maintained a neutral rating, highlighting challenges such as an inventory glut in Europe and Tesla's market share gains in California [6] Future Guidance - For the first quarter, SolarEdge is guiding for sales between 195 million and $215 million, indicating a sequential quarterly sales growth of approximately 4.5% at the midpoint of the guidance range [7] - The stock remains down about 76% over the past year, but potential substantial gains could occur if the company achieves consistent sequential growth in upcoming quarters [7]