Key Takeaways
- On February 27, SolarEdge (SEDG) declined 9.5% to close at $36.57, trading on approximately half its typical daily volume.
- Solar companies across the industry suffered steep losses: Sunrun plummeted 35%, Array Technologies fell 34%, and Shoals Technologies dropped 31% following their earnings releases.
- Industry-wide challenges include tariff-related margin compression and reduced federal incentives that have dampened residential solar adoption.
- While SolarEdge exceeded Q4 expectations for both earnings and revenue, the company continues operating at a loss with a -34.2% net margin.
- Wall Street’s consensus rating on SEDG is “Reduce,” with analysts projecting an average target price of $27.28 — significantly below its current market price.
Shares of SolarEdge Technologies (SEDG) slid 9.5% during trading on February 27, finishing the session at $36.57 compared to the previous close of $40.40.
SolarEdge Technologies, Inc., SEDG
The decline occurred on notably light trading activity — approximately 1.57 million shares changed hands, roughly half the company’s average daily volume of 3.16 million.
SolarEdge’s struggles were part of a broader industry pattern. Solar stocks experienced widespread declines throughout the week.
Sunrun crashed 35% following its quarterly report. Array Technologies tumbled 34%. Shoals Technologies shed 31%. First Solar retreated 14%. The Invesco Solar ETF posted an 8% weekly decline — marking its steepest five-day drop since June.
This widespread selloff signals genuine structural challenges facing the industry, extending beyond temporary market volatility.
Companies including First Solar, Array, and Shoals specifically highlighted tariff impacts during their earnings presentations, noting significant margin pressure. Changes to federal energy policy have diminished consumer incentives, while demand for residential solar installations shows concerning weakness.
According to Wood Mackenzie projections, residential solar installations across the United States are expected to contract 18% in 2026.
Sunrun’s latest results confirmed this deteriorating trend. The company reported 17% fewer new subscribers in Q4 2025 compared to the same quarter in 2024, while the net customer value declined 30% quarter-over-quarter. Management’s 2026 outlook failed to inspire confidence — Jefferies analyst Julien Dumoulin-Smith responded by downgrading the stock from Buy to Hold, pointing to expectations for “a more prolonged period of market contraction.”
First Solar’s Shrinking Backlog Signals Deeper Problems
First Solar’s project backlog contracted to 50.1 gigawatts by year-end 2025, down sharply from 68.5 gigawatts at the beginning of the year.
During the quarter, contract cancellations and terminations exceeded new bookings — 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 approximately 15% short of previous expectations across key metrics including shipment volumes, revenue, and EBITDA. He maintained a Market Perform rating, stating his preference to “wait out the near-term negatives.”
SolarEdge Delivered a Complicated Quarterly Report
Notwithstanding the stock’s decline, SolarEdge’s Q4 results actually surpassed Wall Street expectations. The company posted a loss of $0.14 per share, narrower than the anticipated $0.19 loss. Revenue reached $333.8 million, topping the $330.33 million consensus estimate and representing 70.9% year-over-year growth.
However, profitability remains elusive. The company’s net margin stands at -34.2% with return on equity at -45.5%.
Wall Street maintains a predominantly bearish stance on SEDG. The consensus rating is “Reduce,” consisting of one Buy rating, 16 Hold ratings, and seven Sell ratings. The mean price target of $27.28 sits below the stock’s current trading level.
Recent analyst actions include 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 exhibits a beta of 1.66.
Institutional ownership accounts for 95.1% of outstanding shares.
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