Key Takeaways
- SolarEdge (SEDG) plunged 9.5% to $36.57 on February 27, trading on approximately half its typical daily volume.
- Solar stocks experienced significant declines across the board, with Sunrun plummeting 35%, Array Technologies dropping 34%, and Shoals Technologies falling 31% following earnings reports.
- Industry-wide challenges including tariff impacts and changes to federal energy policies are creating margin pressures and reducing residential solar demand.
- While SolarEdge exceeded Q4 earnings and revenue forecasts, the company continues to operate at a loss with a net margin of -34.2%.
- Wall Street maintains a “Reduce” consensus rating on SEDG, with an average target price of $27.28 — significantly lower than current levels.
Shares of SolarEdge Technologies (SEDG) tumbled 9.5% on February 27, finishing the session at $36.57 compared to the previous close of $40.40.
SolarEdge Technologies, Inc., SEDG
Trading activity was notably subdued, with approximately 1.57 million shares changing hands — roughly half the company’s 3.16 million average daily volume.
The decline wasn’t an isolated incident. Solar companies experienced a brutal week across the industry.
Sunrun plummeted 35% following its earnings release. Array Technologies shed 34%. Shoals Technologies declined 31%. First Solar fell 14%. The Invesco Solar ETF dropped 8% over the five-day period — marking its steepest weekly decline since June.
This widespread selloff signals genuine structural challenges facing the sector, not merely temporary market volatility.
Companies including First Solar, Array, and Shoals specifically highlighted tariff impacts during their earnings presentations. Meanwhile, modifications to federal energy programs have diminished consumer incentives, contributing to softening demand particularly in the residential market segment.
According to Wood Mackenzie projections, U.S. residential solar installations are expected to contract by 18% in 2026.
Sunrun’s quarterly results validated this deteriorating trend. The company’s Q4 2025 subscriber additions fell 17% compared to the same period in 2024, while the net customer value decreased 30% during the quarter. The company’s 2026 outlook further dampened investor confidence — Jefferies analyst Julien Dumoulin-Smith downgraded the shares to Hold from Buy, anticipating “a more prolonged period of market contraction.”
First Solar’s Declining Backlog Raises Concerns
First Solar’s contract backlog declined to 50.1 gigawatts by year-end 2025, down substantially from 68.5 gigawatts at the beginning of the year.
The company experienced more contract cancellations and terminations than new orders during the quarter — marking the seventh straight quarter of declining backlog, as noted by Raymond James analyst Bobby Zolper.
Zolper observed that the company’s 2026 and 2027 projections fell short of prior estimates by approximately 15% across shipment volumes, revenue, and EBITDA metrics. He maintained his Market Perform rating, suggesting investors should “wait out the near-term negatives.”
SolarEdge Delivered Better-Than-Expected Results
Despite Thursday’s stock decline, SolarEdge’s Q4 performance actually surpassed Wall Street expectations. The company posted an EPS loss of $0.14, narrower than the anticipated $0.19 loss. Revenue reached $333.8 million, topping the $330.33 million consensus estimate and representing a 70.9% year-over-year increase.
However, profitability remains elusive. The company’s net margin stands at -34.2% with return on equity at -45.5%.
Wall Street analysts maintain a predominantly bearish stance on SEDG. The consensus rating is “Reduce,” comprised of one Buy rating, 16 Hold ratings, and seven Sell ratings. The average analyst price target of $27.28 sits below current trading prices.
Recent analyst activity includes Deutsche Bank lowering its price target from $35 to $33 while maintaining a Hold rating on February 20, and Morgan Stanley increasing its target from $33 to $40 with an Equal Weight rating on February 19.
Technically, the stock’s 50-day moving average stands at $33.76, while the 200-day moving average is $34.19. SEDG carries a market capitalization of roughly $2.06 billion and a beta coefficient of 1.66.
Institutional ownership accounts for 95.1% of outstanding shares.
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