On Friday, Susquehanna maintained a Positive rating on SolarEdge Technologies (NASDAQ:) but lowered its price target to $92 from $97.
The adjustment reflects a revised outlook on the company’s future shipments and earnings due to a challenging demand environment in the U.S. and an oversupplied European market. The firm now expects SolarEdge to ship 7.1 gigawatts (GW) in 2024 and 10.0 GW in 2025, a decrease from the previous forecast of 7.7 GW and 10.7 GW, respectively.
The analyst from Susquehanna indicated that SolarEdge anticipates under-shipping compared to end-market demand as a strategy to balance inventory levels, aiming for equilibrium by the fourth quarter. This recalibration is in response to the current market conditions that are affecting the renewable energy sector. Despite the lowered shipment projections, the firm predicts that SolarEdge will experience a revenue decline of 46% in 2024, followed by a significant rebound of 50% in 2025.
The earnings per share (EPS) estimates for SolarEdge have also been adjusted, with the firm now expecting the company to report an EPS of $(1.68) for 2024 and $3.71 for 2025. This represents a downward revision from the previous EPS estimates of $(1.21) for 2024 and $4.01 for 2025. The revised figures take into account the anticipated impact of the current market dynamics on SolarEdge’s financial performance.
In summary, while Susquehanna continues to see SolarEdge in a favorable light, the firm has recognized the need to adjust its expectations based on the prevailing demand and supply challenges in the industry. The new price target of $92 reflects these updated projections and the firm’s outlook on the company’s ability to navigate the market headwinds in the coming years.
InvestingPro Insights
As SolarEdge Technologies (NASDAQ:SEDG) navigates a complex market environment, real-time data from InvestingPro provides a deeper look into the company’s financial health and stock performance. Currently, SolarEdge boasts a market capitalization of $3.93 billion, a significant figure that underscores the company’s scale within the renewable energy sector. Despite a challenging year, SolarEdge has managed to maintain a gross profit margin of 25.65% over the last twelve months as of Q1 2023, which is a testament to its operational efficiency in a competitive landscape.
InvestingPro Tips highlight that SolarEdge is trading at a high earnings multiple, with an adjusted P/E ratio of 37.08, reflecting investor expectations of future earnings growth. However, it’s worth noting that analysts anticipate a sales decline and a drop in net income for the current year, which could be contributing factors to the stock’s 75.34% decline over the past year. On the positive side, SolarEdge operates with a moderate level of debt and its liquid assets exceed short-term obligations, providing some financial stability.
For investors seeking additional insights, there are 9 more InvestingPro Tips available, which can offer a broader perspective on SolarEdge’s performance and potential investment opportunities. To explore these tips and leverage advanced analytical tools, consider subscribing to InvestingPro using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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