TLDR
- On February 27, SolarEdge (SEDG) declined by 9.5% to reach $36.57, with trading volume at half of its normal level.
- The broader solar sector suffered significant losses. After earnings announcements, Sunrun dropped 35%, Array Technologies fell 34%, and Shoals Technologies decreased 31%.
- Tariffs are compressing profit margins across the industry, and federal policy changes have diminished consumer incentives for residential solar.
- SolarEdge outperformed Q4 EPS and revenue estimates, yet it remains unprofitable, with a negative net margin of 34.2%.
- The analyst consensus on SEDG is “Reduce,” with an average price target of $27.28, which is well below the current trading levels.
On February 27, SolarEdge Technologies (SEDG) dropped 9.5%, closing at $36.57 after previously trading at $40.40.
This movement occurred on low volume, with around 1.57 million shares traded, approximately half of the daily average of 3.16 million.
SEDG was not alone. It was a tough week for the entire solar sector.
declined 35% after reporting earnings. Array Technologies dropped 34%. Shoals Technologies lost 31%. First Solar decreased 14%. The Invesco Solar ETF fell 8% for the week, its worst five – day period since June.
The sell – off reflects real pressure building across the sector, not just a short – term bad news cycle.
Tariffs are eroding profit margins at First Solar, Array, and Shoals, and all of these companies highlighted the impact during their earnings calls. Federal energy policy changes have reduced some consumer incentives, and demand, especially in residential solar, is weakening.
Wood Mackenzie estimates that U.S. residential solar installations will decline by 18% in 2026.
Sunrun’s figures showed that this trend is already underway. In Q4 2025, the company added 17% fewer subscribers compared to Q4 2024, and the net value of each new customer dropped 30% in the quarter. Its 2026 guidance also did not improve sentiment. Jefferies analyst Julien Dumoulin – Smith downgraded the stock from Buy to Hold, citing expectations for “a more prolonged period of market contraction.”
First Solar’s Backlog Tells a Troubling Story
The backlog fell to 50.1 gigawatts at the end of 2025, down from 68.5 gigawatts at the start of the year.
According to Raymond James analyst Bobby Zolper, in the quarter, the company had more cancellations and terminated contracts than new bookings, marking the seventh consecutive quarter of sequential backlog decline.
Zolper noted that the 2026 and 2027 guidance missed prior expectations by approximately 15% in terms of shipment volumes, sales, and EBITDA. He maintained a Market Perform rating and said he would prefer to “wait out the near – term negatives.”
SolarEdge’s Own Numbers Were Mixed
Despite the stock price drop, SolarEdge actually exceeded estimates in Q4. It reported an EPS loss of $0.14, which was better than the expected loss of $0.19. Revenue came in at $333.8 million, ahead of the $330.33 million consensus and up 70.9% year over year.
Still, the company remains unprofitable. The net margin is – 34.2% and the return on equity is – 45.5%.
Analyst sentiment towards SEDG is negative. The current consensus is “Reduce,” with one Buy, 16 Holds, and seven Sell ratings. The average price target is $27.28, which is below the current trading price of the stock.
Recent analyst actions include Deutsche Bank cutting its target from $35 to $33 with a Hold rating on February 20, and Morgan Stanley raising its target from $33 to $40 with an Equal Weight rating on February 19.
The stock’s 50 – day moving average is $33.76 and its 200 – day moving average is $34.19. SEDG has a market cap of approximately $2.06 billion and a beta of 1.66.
Institutional investors hold 95.1% of the stock.
