Twenty years ago, the late Lieutenant General (res.) Guy Sella got together with four people who had served under him: Lior Handelsman, Meir Adest, Yoav Galin, and Amir Fishelov. The five decided that they would set up a company, before they had any idea what sort of company it would be. Shortly afterwards, they fell in love with solar energy, and founded SolarEdge (Nasdaq: SEDG). From that day to this, it has been up and down for the company, especially in the past five years.
SolarEdge, which produces systems for maximizing power production from solar energy, has hit unprecedented highs, and at the end of 2021 it became the biggest Israeli company in terms of market cap, at nearly $20 billion. It entered the S&P 500 Index list, and was one of the hottest names on Wall Street.
But then, in 2023, the trend changed. The financial results disappointed, deals were canceled, stock piled up, and the company’s guidance became less and less positive. By the end of 2024, SolarEdge has sunk to a market cap of less than $600 million, having lost 95% of its value since the peak. Of course it dropped out of the S&P 500, and embarked on four rounds of layoffs in which it shed 2,000 employees, hundreds of them in Israel.
Then came 2025. There are signs of recovery at the company and market players start to see “light at the end”. So far this year SolarEdge has more than doubled its market cap, and despite a negative patch in the past few weeks it is still up 114% for the year to date and up by more than 170% from the low of November 2024. Its current market cap is $1.7 billion.
Recovery in the business as well
The rise in SolarEdge’s share price has come despite the fact that the cancellation of tax breaks in the US and the US trade tariffs might have been expected to have an adverse effect on the company. But the market is rewarding it for the streamlining program introduced by CEO Shuki Nir, who was appointed a year ago. The program has already started to make an impact on the company’s results.
“SolarEdge’s recovery is impressive, and it’s not just in the stock but in the business as well,” says Oppenheimer & Co. senior analyst Sergey Vastchenok. “The behavior of the stock reflects the significant improvement of the business under Nir, who has brought about a very serious turnaround at the company and put it back on track. “
Analysts not optimistic
Today’s SolarEdge still suffers from the lack of confidence in it on the part of analysts and investors, but it’s a rather different company from what it was even just a year ago, with a different CEO and a different CFO (Asaf Alperovitz). It is once more generating positive cash flow, such that if a year ago there were fears for its very existence, today the questions are about growth, increasing profit margins, and taking market share from competitors.
Vastchenok believes that the trouble started from the company growing too fast. “When a company grows rapidly, it tends to get distracted by all kinds of things and its expense structure expands in the expectation that the growth will continue. And then the growth stops, revenue falls, and the company is left with a bloated expense structure that prevents it from making a profit. In the end it turned out that stocks had risen along its entire distribution chain, and that is what toppled the business when everything stopped; that, and the flooding of the market with cheap merchandise from China,” he says. Stocks accumulated at distributors led to a sharp decline in orders from the company.
SolarEdge shut down loss-making activities and, as mentioned, carried out four rounds of layoffs within two years, the latest coming under Nir. “The new management dealt with the acute financial matters, switched the company to a positive cash flow for the second successive quarter, and now needs to continue to launch new products,” Vastchenok says.
Another factor that supported the stock this year was the certainty that arose when US President Trump’s “big beautiful bill” was passed. The bill did cancel tax breaks for solar projects, but not completely, and left intact certain tax incentives relevant to SolarEdge’s business.
At the moment, most analysts are still skeptical about the stock and it seems that confidence has not yet been restored. According to “The Wall Street Journal”, nineteen analysts are neutral on the stock and six are negative, and not a single one recommends buying it. The average price target is 16% above market.
One of the analysts with a negative stance is Julien Dumoulin-Smith of Jefferies, who, after the third quarter financials, wrote that the economic fundamentals were better, but that the upside was limited. He said that the clouds were dispersing, and mentioned positive forecasts for the domestic and commercial solar installation market, and improvement in the profit margins. Nevertheless, following the sharp rise in the share price he remains negative on the stock because of the downside risk.
“Investors need patience but the pricing is cheap”
One of the most significant turning points for the stock came with the release of the third quarter financials last month. SolarEdge beat the analysts’ estimates with revenue of $340 million (44.5% more than in the corresponding quarter), and a GAAP-based loss of $50.1 million, considerably smaller than the $1.23 billion loss in the corresponding quarter of 2024, which was mainly due to write-downs. For the first nine months of this year, cash flow was positive, at $51.6 million, which compares with negative cash flow of $351 million in the corresponding period of 2024.
On the day the financials were released SolarEdge’s share price jumped 29%. Among the reasons for that were the improvement in gross profit margins, and the company’s assurance to investors that unlike its US competitor Enphase Energy, Inc. it did not expect a decline in revenue in the first quarter of 2026 beyond the usual seasonal drop.
Investors were also encouraged by an announcement of a collaboration with chip company Infineon on the development of highly efficient energy infrastructure for the next generation of data centers. “The potential in the AI market is a very important basis for SolarEdge’s future growth. The AI market is considerably bigger than the solar market and could yield much higher revenue,” says Vastchenok. He adds that SolarEdge expects to enter the market for power systems management at data centers, and in this respect it does not matter whether the power is generated from solar energy or some other source; SolarEdge’s systems can deal with it.
Dumoulin-Smith sees the collaboration with Infineon as interesting, but says that this is only the start. Vastchenok agrees. “This is a growth engine that is not priced into the stock, but it’s potential that will not be realized in the short term,” he says. For now, Vastchenok sees a substantial weakening in domestic solar installations in the US because of the cancellation of the incentives, but he believes that SolarEdge will be less badly hit than Enphase Energy. “The CEO came to do a job. Investors need to be patient. The process is a long one, but there’s light at the end of the tunnel and the company’s pricing is very cheap,” he says.
Published by Globes, Israel business news – en.globes.co.il – on December 22, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
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