SolarEdge Technologies (SEDG): Assessing Valuation After Analyst Price Target Upgrades and Policy Tailwinds

SolarEdge Technologies (SEDG) caught investor attention after a string of analyst updates this week. Multiple firms nudged their expectations for the company higher, citing positive policy tailwinds while also highlighting ongoing financial challenges.

See our latest analysis for SolarEdge Technologies.

SolarEdge Technologies has seen a remarkable shift in sentiment lately, coinciding with a 39% share price return over the past 90 days and an eye-opening 150% gain year-to-date. Even after this surge, the stock’s one-year total shareholder return of 114% only partly balances out long-term losses. Three- and five-year total returns remain deeply negative. Recent momentum suggests that investors are betting on a recovery story, fueled by sector tailwinds and re-evaluated risks.

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With Wall Street’s targets moving steadily higher, but ratings still cautious, the key question is whether SolarEdge Technologies remains undervalued or if the stock’s recent surge has already factored in next year’s growth.

Most Popular Narrative: 47.5% Overvalued

SolarEdge Technologies’ most widely discussed valuation places its fair value at $25.10, well below its last close of $37.02. The narrative reflects a sharply different outlook than current market pricing and is shaped by bold growth expectations and policy-driven tailwinds.

The rally in SolarEdge's stock appears to be pricing in robust future revenue growth driven by U.S. policy support (extension of manufacturing and storage credits), but risks are rising as the elimination of the 25D residential solar tax credit is expected to cause a substantial drop in U.S. residential demand in 2026. This drop may be only partially offset by third-party owned (TPO) shifts, potentially constraining topline growth.

Read the complete narrative.

What assumptions fuel a valuation that is nearly 50% below market price? It hinges on future profitability, eye-catching profit margin swings, and outsized growth forecasts that only a handful of companies achieve. Uncover the exact levers driving this polarizing fair value, evidence that could reshape how you see SolarEdge Technologies’ potential.

Result: Fair Value of $25.10 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if U.S. manufacturing incentives are extended or if battery storage adoption accelerates, SolarEdge’s outlook could shift meaningfully and challenge the current valuation narrative.

Find out about the key risks to this SolarEdge Technologies narrative.

Another View: Discounted Cash Flow Signals Undervaluation

While market multiples suggest SolarEdge Technologies is overvalued, our DCF model offers a sharply different outlook. By analyzing future cash flows, the SWS DCF model estimates a fair value of $70.49, which is nearly double the current share price. Does this indicate a real opportunity that multiples-based models might be missing?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own SolarEdge Technologies Narrative

If you have your own perspective or want to see how the data fits your outlook, it’s easy to create your own narrative and share your findings in just a few minutes, so why not Do it your way

A great starting point for your SolarEdge Technologies research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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