SolarEdge: Low Probability That Residential Solar Will Recover In 2025

Summary:

  • SolarEdge Technologies has faced a significant decline of ~59% since a bearish outlook was published by me in May due to poor Q2 performance amid macroeconomic challenges.
  • The company’s cash-flow fundamentals are weak, and a substantial inventory buildup could lead to significant write-downs and financial issues by 2025.
  • Customers may choose to avoid SolarEdge in favor of Enphase due to perceptions of its stability risk.
  • Even if interest rates decline, a hard economic landing may increase solar lending costs sufficiently that it remains uneconomic for most homeowners.
  • Although SolarEdge’s downside risk remains significant, it is likely too dangerous to short, given excessive short interest on the stock and its recovery potential, given a potential soft economic landing.

Husband explain to wife about solar cell inverter.

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In May, I published a bearish outlook on the solar product company SolarEdge Technologies (NASDAQ:SEDG) in “SolarEdge: Lost Its Edge Over The Competition.” At the time, I had a particularly bearish outlook on the stock


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