Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 29 Aug, 25 | SEDG | Buy | USD 33.48 | USD 35.18 | USD 36.8 | 6 days | Closed |
5.08%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, manufactures, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in the United States, Germany, the Netherlands, Italy, rest of Europe, and internationally. The company offers power optimizers, inverters, lithium-ion cells, batteries, storage solutions, electric vehicle chargers and software management of EV charging, smart energy products, smart trackers, and smart energy management software products; Monitoring platform, a cloud-based monitoring platform, which collects power, voltage, current temperature, and other data sent from inverters and power optimizers; and MySolarEdge app, that enables system owners to track their real-time system production and household energy consumption. It also provides SolarEdge Go app, a mobile application for installers, integrating installation, management, and service capabilities; Designer platform, a web-based tool that helps solar professionals to plan, build, simulate, and validate residential and commercial systems; Mapper application for registering the physical layout of new PV sites installed with DC optimized inverter systems; SetApp application, that activates and configurate inverters; and grid services. In addition, the company offers pre-sales support and ongoing training services, as well as technical support before, during, and after installation services. It serves solar installers; providers of solar PV systems to residential and commercial end users; key solar distributors; engineering, procurement, and construction firms; and electrical equipment wholesalers. SolarEdge Technologies, Inc. was incorporated in 2006 and is headquartered in Herzliya Pituach, Israel.
Gross Margin Expansion: Non-GAAP gross margin improved to 13.1% in Q2 FY25 from 6.2% in Q2 FY24, indicating better cost absorption and regional mix
Revenue Growth: Non-GAAP revenue increased from USD 325 million in Q2 FY24 to USD 281 million in Q2 FY25 excluding divestitures, with the U.S. contributing 66% of sales, reflecting strength in domestic manufacturing and demand
Net Loss: Non-GAAP net loss increased to USD 47.7 million in Q2 FY25 from USD 32 million in Q2 FY24, despite revenue growth, highlighting ongoing profitability challenges
Operating Loss: Non-GAAP operating loss widened to USD 48.3 million in Q2 FY25 compared to USD 22 million in Q2 FY24, reflecting restructuring charges and divestitures
SolarEdge faces significant investment risk from persistent operating losses, tariff headwinds, and heightened dependency on U.S. policy incentives, which could materially impact profitability and market competitiveness if regulatory or demand dynamics shift
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 33.48 | 28.5 | 35.18 | 36.8 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Regulatory and Policy Environment: SolarEdge highlighted the positive impact of recent regulatory changes, particularly the “One Big Beautiful Bill Act,” which has provided clarity and stability to the solar and storage markets. The preservation of the 45X advanced manufacturing credit for seven years reinforces the company’s U.S. manufacturing strategy. Additionally, extended storage tax credits are expected to drive further battery adoption, expanding the company’s addressable market.
Strategic Alignment with U.S. Manufacturing: The company emphasized its commitment to onshoring production in the U.S., capitalizing on incentives that favor domestically manufactured products. This approach not only aligns with federal guidelines on FEOC requirements and domestic content but also strengthens SolarEdge’s ability to serve both domestic and international customers. Management believes this positions the firm competitively for long-term growth.
Market Share Recovery Initiatives: SolarEdge reported progress in regaining market share, particularly in the U.S. residential market, where the shift toward third-party ownership (TPO) models is expected to accelerate from 2026. The company also secured multi-year agreements with Solar Landscape and a leading U.S. retailer for commercial and industrial deployments, underscoring its value proposition in the enterprise segment. In Europe, pricing strategies and distribution alignment contributed to early signs of market share gains, although overall share remains below historical levels.
Focus on Innovation and Software Solutions: Innovation remains central to SolarEdge’s turnaround strategy. The Nexis platform, set for rollout later this year, is designed to simplify installation and integration of inverters and batteries. Commercial storage sales reached record levels, and the company anticipates continued adoption across C&I markets. Additionally, the Wevo EV charging software gained momentum, securing partnerships with PG&E, Con Edison, and Schaeffler Group, highlighting its expanding role in energy management and EV infrastructure.
U.S. Manufacturing Expansion: The company continued to strengthen its U.S. manufacturing footprint, with facilities producing residential inverters in Texas, commercial inverters and optimizers in Florida, and batteries in Utah. Plans are in place to further scale production to meet export demand, particularly in Europe. Management views this as a cornerstone of its competitive strategy, enabling resilience against tariff fluctuations and positioning SolarEdge as a global supplier of U.S.-made products.
Financial Performance: SolarEdge reported Q2 2025 revenues of USD 289 million, or USD 281 million excluding discontinued operations. U.S. revenues represented 66% of the total, while Europe and other international markets contributed 23% and 11%, respectively. Non-GAAP gross margin improved significantly to 13.1%, driven by higher utilization and favorable regional mix, partially offset by tariff impacts. The company also reduced its operating loss to USD 48.3 million and net loss to USD 47.7 million, reflecting stronger revenue and disciplined cost management.
Balance Sheet and Outlook: The company ended Q2 with USD 812 million in cash and investments, maintaining a net cash position of USD 470 million. Inventory declined by USD 108 million, marking the fifth consecutive quarter of reduction, while free cash flow usage of USD 9 million was primarily due to working capital timing. Management reiterated its expectation to be free cash flow positive for full-year 2025 and confirmed its ability to redeem USD 343 million in convertible notes maturing next month. For Q3 2025, SolarEdge guided revenues between USD 315 million and USD 355 million with gross margins of 15–19%.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on SolarEdge Technologies, Inc. (Nasdaq: SEDG) at the current market price of USD 33.48, as on August 29,2025 at 7:30 am PDT.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Solar
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| SEDG SolarEdge Technologies Inc |
-0.38 1.29% | 29.10 | - | 113.64 | 1.42 | 2.19 | 1.53 | 52.70 |
| FSLR First Solar Inc |
-5.81 2.25% | 252.70 | 16.61 | 9.35 | 5.36 | 2.72 | 5.21 | 11.40 |
| ENPH Enphase Energy Inc |
-0.17 0.53% | 31.69 | 136.61 | 18.32 | 6.79 | 9.24 | 6.51 | 53.17 |
| NXT Nextracker Inc. Class A Common Stock |
-2.16 2.45% | 85.84 | 16.44 | 12.44 | 2.71 | 15.50 | 2.46 | 15.56 |
| XISHY Xinyi Solar Holdings Limited |
- -% | 8.00 | 11.55 | 14.93 | 0.22 | 1.24 | 0.24 | 1.12 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 29,2025. The reference data in this report has been partly sourced from REFINITIV.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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