SolarEdge cut to Sell equivalent at Piper Sandler as big cost cuts ‘needed for survival’

SolarEdge Technologies (NASDAQ:SEDG) +1.6% in Thursday’s trading, a day after shares plunged 22% on concerns that the new Trump administration will weaken support for the solar industry.

Late Wednesday, the company reported a Q3 loss of $1.21B, or a loss $21.13/share, ballooning from a loss of $61.2M, or a loss of $1.08/share, a year earlier, as the firm booked a $1.03B impairment charge on the value of assets; Q3 revenues sank 64% Y/Y to $260.9M, and the cost of sales skyrocketed 65% to $963.2M.

SolarEdge (SEDG) forecast Q4 revenues to fall further to $180M-$200M, compared to $309M analyst consensus estimate.

Piper Sandler analyst Kashy Harrison downgraded SolarEdge (SEDG) to Underweight from Neutral with a $9 price target, slashed from $17, believing “radical cost reductions are required for survival.”

Management attributes sequentially declining revenue to European battery sales and European inverter pricing plus promotions, but Harrison finds sequentially declining revenues concerning as SolarEdge (SEDG) is no longer destocking the U.S. channel.

“With DSOs/DPOs at normal levels, subdued sales into distribution, higher Q4 2024/Q1 2025 U.S. manufacturing expenses, no formal plan in place (yet) to reset headcount, European headwinds, and the Tesla threat, we struggle to see how cash flow improves next year and view another capital raise as likely,” Harrison writes.