SolarEdge Technologies, Inc. (NASDAQ:SEDG) Analysts Are More Bearish Than They Used To Be

Market forces rained on the parade of SolarEdge Technologies, Inc. (NASDAQ:SEDG) shareholders today, when the analysts downgraded their forecasts for next year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After this downgrade, SolarEdge Technologies' 33 analysts are now forecasting revenues of US$1.4b in 2025. This would be a sizeable 30% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 82% to US$5.22 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$1.8b and losses of US$3.56 per share in 2025. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for SolarEdge Technologies

The consensus price target fell 27% to US$19.99, implicitly signalling that lower earnings per share are a leading indicator for SolarEdge Technologies' valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting SolarEdge Technologies' growth to accelerate, with the forecast 23% annualised growth to the end of 2025 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that SolarEdge Technologies is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for next year. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple SolarEdge Technologies analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.