TLDR
- SolarEdge (SEDG) tumbled 9.5% on February 27, closing at $36.57 on approximately half its typical trading volume.
- The solar industry experienced significant declines, with Sunrun plunging 35%, Array Technologies dropping 34%, and Shoals Technologies falling 31% following quarterly results.
- Industry-wide margin compression from tariffs and reduced federal incentives for residential solar installations are weighing on the sector.
- SolarEdge exceeded Q4 earnings and revenue projections, though the company continues to operate at a loss with a net margin of -34.2%.
- Wall Street’s consensus rating on SEDG is “Reduce” with a mean price target of $27.28 — significantly below current price levels.
SolarEdge Technologies (SEDG) plummeted 9.5% on February 27, finishing the session at $36.57 compared to its previous close of $40.40.
SolarEdge Technologies, Inc., SEDG
Trading activity was notably subdued — roughly 1.57 million shares changed hands, representing approximately 50% of the 3.16 million daily average.
SEDG’s decline wasn’t an isolated incident. The entire solar industry endured a challenging week.
Sunrun tumbled 35% following its earnings report. Array Technologies shed 34%. Shoals Technologies declined 31%. First Solar dropped 14%. The Invesco Solar ETF posted an 8% weekly loss — marking its steepest five-day decline since June.
This widespread selloff points to genuine structural challenges facing the industry, not merely negative headlines.
Tariff-related margin pressure has impacted First Solar, Array, and Shoals, with all three companies addressing these headwinds during recent earnings discussions. Changes to federal energy policy have diminished certain consumer incentives, while demand — particularly for residential solar systems — continues to soften.
According to Wood Mackenzie’s projections, U.S. residential solar installations are expected to contract 18% in 2026.
Sunrun’s quarterly performance confirmed this weakening trend. The company reported 17% fewer new subscribers in Q4 2025 compared to the same period in 2024, while the net value per new customer decreased 30% during the quarter. Its 2026 outlook further dampened investor enthusiasm — Jefferies analyst Julien Dumoulin-Smith downgraded the shares to Hold from Buy, anticipating “a more prolonged period of market contraction.”
First Solar’s Backlog Tells a Troubling Story
First Solar’s project backlog decreased to 50.1 gigawatts by the end of 2025, down sharply from 68.5 gigawatts at year-start.
The company experienced more contract cancellations and terminations than new bookings during the quarter — marking the seventh straight quarter of sequential backlog reduction, per Raymond James analyst Bobby Zolper.
Zolper observed that 2026 and 2027 guidance fell short of previous expectations by approximately 15% across key metrics including shipment volumes, sales, and EBITDA. He maintained a Market Perform rating, preferring to “wait out the near-term negatives.”
SolarEdge’s Own Numbers Were Mixed
Despite the stock’s decline, SolarEdge surpassed Wall Street forecasts in Q4. The company posted an EPS loss of $0.14, narrower than the anticipated loss of $0.19. Revenue totaled $333.8 million, exceeding the $330.33 million consensus estimate and representing a 70.9% year-over-year increase.
However, profitability remains elusive. The company’s net margin stands at -34.2% while return on equity registers at -45.5%.
Wall Street sentiment toward SEDG leans bearish. The prevailing consensus is “Reduce,” comprising one Buy rating, 16 Hold ratings, and seven Sell ratings. The mean price target of $27.28 sits below the stock’s current trading range.
Recent analyst activity includes Deutsche Bank lowering its price target from $35 to $33 with a Hold rating on February 20, while Morgan Stanley increased its target from $33 to $40 with an Equal Weight rating on February 19.
The stock’s 50-day moving average stands at $33.76 while its 200-day moving average is $34.19. SEDG maintains a market capitalization of roughly $2.06 billion with a beta of 1.66.
Institutional ownership represents 95.1% of outstanding shares.
