SolarEdge Technologies (SEDG) PT Lowered to $25 at Piper Sandler

Piper Sandler analyst Kashy Harrison lowered the price target on SolarEdge Technologies (NASDAQ: SEDG) to $25.00 (from $29.00) while maintaining a Neutral rating.

The analyst commented, "Unfavorable update from SEDG despite low expectations. 3Q revs were 23% below the Street and margins were anemic. SEDG expects $70-$90M of 3Q cash burn (less in 4Q). As expected, the European channel won't clear until 1H'25. However, SEDG's US sellthrough commentary was solid given TPO leverage. SEDG expects to clear the US channel by the end of 3Q'24 and is currently selling domestic content compliant product. Looking ahead, SEDG faces the unenviable task of balancing rising manufacturing spend, new product introductions, draining distribution, draining balance sheet inventory, while hoping corporate sell-through remains stable. And if SEDG successfully clears the channel thereby increasing sales to ~$550M, current demand yields 23-26% GMs including credits (highend ex-legacy battery headwind) and 4-7% OPMs which remains unattractive. On a less negative note, much of the prior $150M burn disclosure was driven by discretionary items; accordingly, SEDG has more running room than we previously feared."

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