SolarEdge Technologies (NASDAQ:SEDG) stock was down 15.5% in the pre-market trading session today. The decline came after the company disclosed its plans to offer $300 million in convertible senior notes through a private placement. Further, SEDG warned of a potential $11.4 million loss as one of its major customers, PM&M Electric, filed for bankruptcy.
Also, the company expects a negative free cash flow of nearly $150 million in the second quarter due to investments and slower-than-expected collections of receivables.
SEDG is a smart energy technology company that provides solar inverters, power optimizers, and systems to monitor photovoltaic arrays.
Private Offering Details
The company said that the convertible notes will mature on July 1, 2029, and will be available for purchase by qualified institutional buyers. The offering also includes an overallotment option, under which underwriters can buy another $45 million of notes.
SolarEdge intends to use the money to redeem existing 2025 convertible notes, buy new capped call transactions, and for general needs.
Is SEDG Stock a Good Buy?
The recent debt offering indicates that the management is less confident about the near-term recovery of the company’s performance. It is worth mentioning that, following the news, Goldman Sachs (GS) analyst Brian K. Lee reiterated a Sell rating on SEDG stock.
Overall, Wall Street analysts are sidelined on SolarEdge. It has a Hold consensus rating based on four Buy, 16 Hold, and three Sell ratings. The analysts’ average price target on SEDG stock of $67.42 implies 102.77% upside potential. Shares of the company have declined 65.7% in the past six months.
