Shares of SolarEdge Technologies (SEDG) tanked on Wednesday after Citi downgraded the solar stock from Neutral to Sell with a $9 price target due to tight liquidity, weak earnings prospects, and declining market conditions in Europe. In addition, Citi analyst Vikram Bagri pointed to shrinking European solar demand and noted that despite ongoing promotions, SolarEdge has not been able to increase its market share.
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The company also forecast mid to high single-digit price reductions for 2025, with European prices expected to drop by double digits. Interestingly, today’s downgrade contrasts Goldman Sachs’ recent double upgrade to Buy, where it argued that market fears are overstated.
SolarEdge Layoffs
Separately, just days ago, SolarEdge announced another 400 layoffs—the fourth round of job cuts in the past year—as the company struggles with an industry-wide solar downturn. SolarEdge previously disclosed that it expects to incur $3M-$5M in charges for the recent layoffs but anticipates quarterly savings of $9M-$11M once the cuts are complete.
Furthermore, earlier this week, SolarEdge shared that it signed agreements with Sunrun (RUN) and a U.S. solar financing company to provide inverters, power optimizers, and batteries made in the U.S. The company also completed its second sale of manufacturing tax credits in order to help offset the challenges of a tough market.
Is SEDG Stock a Buy or Sell?
Overall, analysts have a Hold consensus rating on SEDG stock based on two Buys, 13 Holds, and six Sells assigned in the past three months, as indicated by the graphic below. After an 80% decline in its share price over the past year, the average SEDG price target of $12.73 per share implies 16.9% downside risk.
