Solaredge Technologies Inc (SEDG)

SolarEdge Technologies Inc (SEDG) stock dropped by 6.33% due to Barclays downgraded the stock from Equal-Weight to Underweight and lowered its price target from $74 to $50. The downgrade was based on several identified downside risks for SolarEdge:

• Challenges in the company's top-line recovery.
• Concerns about gross margins.
• Maintaining market share against larger competitors like Tesla and Enphase Energy.
• Rising shipping costs, particularly after the company's Mexico facility shutdown, which will require shipping products from Asia. Barclays expressed a preference for Enphase Energy, believing it is better positioned for recovery. The consensus price target for SolarEdge, according to analysts, is $154.45.

Shares of Solaredge Technologies Inc (SEDG) dropped by 7.23% from $102.24 to $94.85 in the trading on Wednesday, December 20, 2023. The reason why SEDG down today is due to a class-action lawsuit filed by a shareholder on behalf of those who purchased or acquired Solaredge Technologies, Inc. securities between February 22, 2022, and October 19, 2023.

• Nature of the Lawsuit: The lawsuit alleges that during this period, the defendants failed to disclose key information to investors, including inventory issues in Europe and the resulting cancellations and pushouts of backlog. These factors led to an overstatement of the company's backlog and guidance. The lawsuit highlights a conference call on August 1, 2023, where a company executive mentioned elevated inventory levels in Europe, causing a significant drop in the company's share price. Additionally, on October 19, 2023, Solaredge issued a press release disclosing unexpected backlog challenges from European distributors and lower financial performance, leading to a substantial decline in the company's stock price.
• Legal Action and Deadline: Similar shareholders may be eligible to participate in the class-action lawsuit. To become the lead plaintiff, they must file their lead plaintiff papers by January 2, 2024. The lead plaintiff represents other class members in the litigation. The news of the class-action lawsuit contributed to Solaredge Technologies Inc's stock decline on December 20, 2023.

SolarEdge Technologies Stock (SEDG) dropped by 5.07% from $75.60 to $71.77 in the trading on Monday November 6, 2023. The reason why SEDG stock down today is due to the downgrade from analysts. Wells Fargo downgraded SolarEdge Technologies from Overweight to Equal-Weight and lowered the price target from $190 to $82, saying significant uncertainties and a lack of visibility into a recovery outweighs the stock's discounted valuation. Wells Fargo highlighted SolarEdge's quarterly run-rate demand guidance of $600M - $700M, which is below the sell-through in September, suggesting a potential downside if demand remains flat. Wells Fargo underscored that SolarEdge's high fixed cost base could permanently impact gross margins if there is no recovery in demand.

Shares of SolarEdge Technologies (SEDG) dropped by 27.27% from $113.98 to $82.90 in the trading on Friday, October 20, 2023. The reasons why SEDG stock down include:

• SolarEdge's Preliminary Q3 revenue results: SolarEdge made a significant announcement, revealing substantial order cancellations and delays that would result in a projected sales miss of up to $200 million for the third quarter. This represents a sharp 22% drop from previous sales guidance.
• Slower-Than-Expected Solar Installations: SolarEdge faced challenges due to slower-than-anticipated solar power system installations. This led to an inventory surplus at SolarEdge, potentially affecting the sales of solar panels for companies like Sunrun, Sunnova, and SunPower.
• Analyst Downgrades: Several analysts took a negative stance on SolarEdge. BofA downgraded SolarEdge (SEDG) to Underperform from Neutral, setting a $65 price target. This followed a pre-announcement of Q3 results that featured a 20% revenue miss and a 30% reduction in gross profit. Oppenheimer also downgraded SolarEdge Technologies to Perform from Outperform. Additionally, Goldman Sachs downgraded SolarEdge Technologies to Neutral from Buy, setting a price target of $131, down from $254. These downgrades were based on the company's challenging outlook and negative developments.

SolarEdge Technologies Stock (SEDG) dropped by 5.63% from $120.78 to $113.98 in the trading on Thursday October 19, 2023. The reason why SEDG stock down today is due to the Q3 Preliminary Financial Results. SolarEdge cut its outlook for Q3 profits and gross margins and said it expects significantly lower Q4 revenue as it faced a slowdown in solar-power installations in Europe. It seemed to weigh on the stock as did the broader market sell-off, causing SEDG stock down today.

• Q3 revenue to be in a range of $720M - $730M, which compares with a previous expectation of $880M - $920M.
• Adjusted gross margins are seen between 20.1% and 21.1%, versus a prior forecast of between 28% and 31%.
• Adjusted operating income is expected to be in a range of $12M - $31M, whereas the company previously called for $115M - $135M.

SolarEdge Technologies shares plunged 18.36% after Q2 results showed a cash-flow-from-operations loss and eroding margins. Management expects weak Q3 results and worries about pricing pressure due to higher interest rates and lower electricity costs from competitors. The stock's high price-to-earnings ratio adds to investor concerns.

https://www.fool.com/investing/2023/08/02/why-solaredge-stock-plunged-20-today/