SolarEdge surges 13% on Jefferies upgrade, stock extends rebound
Analyst lifts price target to $49 as solar inverter maker shows signs of operational turnaround and path to profitability
SolarEdge Technologies shares surged 13.5% to $51.85 on Friday, marking their highest level since September 2024, after Jefferies Financial Group upgraded the stock from Underperform to Hold and raised its price target by 63% to $49.
The rally extends a remarkable recovery for the solar inverter manufacturer, whose shares have more than quadrupled from a 52-week low of $11 reached late last year. The stock is now trading well above its 50-day moving average of $35.76 and 200-day average of $31.87, signaling a shift in sentiment after months of extreme bearish positioning.
Jefferies analyst Angelo Zino elevated his rating and increased the price target from $30, reflecting growing confidence that the worst of the company's operational challenges have passed. The upgrade comes despite SolarEdge's trailing twelve-month losses of $6.88 per share and negative EBITDA of $219.5 million—metrics that had previously justified Wall Street's deeply pessimistic view.
The Q4 2025 earnings report, released in February, provided evidence of a meaningful turnaround. Revenue jumped 70.9% year-over-year to $335.4 million, beating analyst expectations of $325 million. More importantly, the company swung from a gross loss of $112.3 million in the prior-year period to a gross profit of $74.5 million, demonstrating significant margin recovery.
Adjusted operating losses narrowed dramatically to $48.3 million from $263.7 million a year earlier, while non-GAAP net loss of $0.14 per share far exceeded the consensus estimate of a $0.39 loss. For the full year 2025, SolarEdge generated $77 million in free cash flow, a dramatic improvement from negative $421 million in 2024.
Management has signaled a strategic pivot from defensive measures to offensive growth in 2026. The company has shifted manufacturing to domestic facilities in Texas, Florida, and Utah, allowing it to benefit from Section 45X tax credits while avoiding tariffs on Chinese-made products. This domestic manufacturing focus, combined with a "single SKU concept" and supply chain consolidation, aims to improve operational efficiency and reduce costs.
According to the earnings call transcript, SolarEdge management expects to achieve EBIT profitability later in 2026 if current trends continue. For the first quarter, the company guided revenues between $290 million and $320 million with gross margins of 20% to 24%, suggesting a better-than-normal seasonal trend.
The company is also rolling out its Nexis platform, a modular and stackable battery system designed to improve installation flexibility and reduce commissioning times. High-volume shipments are expected to begin in the third quarter of 2026, with most of the transition completed by the second half of the year.
SolarEdge has strengthened its competitive position in key markets. The company became the number one supplier in the U.S. commercial and industrial solar market and the number two supplier for residential batteries by the third quarter of 2025. Wood Mackenzie recognized SolarEdge as the leading inverter supplier for U.S. rooftop solar installations in 2024.
Despite the positive momentum, challenges remain. The global solar inverter market is projected to contract 9% in 2026, with the U.S. segment potentially declining 22% as Inflation Reduction Act tax credits phase out. SolarEdge currently trades at 6.06 times book value and 2.29 times sales, valuations that some analysts consider stretched for a company yet to achieve sustained profitability.
Analyst sentiment remains mixed overall. Of 28 analysts covering the stock, 22 rate it Hold, 1 recommends Buy, while 3 suggest Sell and 2 Strong Sell. The consensus target price of $35.04 sits below Friday's closing price, suggesting some on Wall Street believe the rally may have gotten ahead of fundamentals.
The next major catalyst will be the Q1 2026 earnings report, expected around May 5, where investors will look for confirmation that operational improvements are translating into sustained profitability and that the Nexis platform rollout is proceeding according to plan. The company's entry into AI data center power solutions, while not expected to impact 2026 revenue, could provide additional growth opportunities beginning in 2027.