Jefferies analyst Julien Dumoulin Smith reiterated a Sell rating on SolarEdge Technologies (SEDG – Research Report) today and set a price target of $12.00.
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Julien Dumoulin Smith’s rating is based on a combination of factors that raise concerns about the sustainability of SolarEdge Technologies’ recent performance. Despite the company reporting better than expected results for the fourth quarter, there is skepticism about the long-term recovery due to the influence of temporary factors like safe-harbor contributions. These factors cloud the underlying recovery, and there is uncertainty about whether the significant inventory sell-through reported will continue once these temporary effects fade.
Moreover, the company’s future guidance remains ambiguous as it is not clear how much of the projected revenue growth is supported by these short-term deals. Additionally, while management has indicated improvements in working capital and operational expenditures, there is hesitation to fully endorse these as signs of a sustainable turnaround given the existing market conditions and competitive pressures. As a result, Julien Dumoulin Smith has issued a Sell rating, reflecting the cautious outlook on the company’s ability to maintain its current trajectory in the absence of these temporary boosts.
In another report released yesterday, Northland Securities also downgraded the stock to a Sell with a $15.00 price target.