SolarEdge (SEDG) Stock Falls 9.5% as Solar Sector Sells Off – Here’s Why

TLDR

• SolarEdge (SEDG) fell 9.5% on February 27 to $36.57, on half its normal trading volume.
• The broader solar sector took heavy losses, with Sunrun down 35%, Array Technologies down 34%, and Shoals Technologies down 31% after earnings.
• Tariffs are squeezing margins across the industry, while federal policy changes have reduced consumer incentives for residential solar.
• SolarEdge beat Q4 EPS and revenue estimates, but remains unprofitable with a negative net margin of 34.2%.
• Analyst consensus on SEDG sits at “Reduce” with an average price target of $27.28 — well below current trading levels.

SolarEdge Technologies (SEDG) dropped 9.5% on February 27, closing at $36.57 after previously trading at $40.40.

SolarEdge Technologies, Inc., SEDG

The move came on thin volume — around 1.57 million shares traded, about half the daily average of 3.16 million.

SEDG wasn’t alone. It was a rough week for solar across the board.

Sunrun fell 35% after reporting earnings. Array Technologies dropped 34%. Shoals Technologies lost 31%. First Solar declined 14%. The Invesco Solar ETF fell 8% for the week — its worst five-day stretch since June.

The selloff reflects real pressure building across the sector, not just a bad news cycle.

Tariffs are eating into margins at First Solar, Array, and Shoals, all of which flagged the impact in their earnings calls. Federal energy policy changes have pulled back some consumer incentives, and demand — especially in residential solar — is weakening.

Wood Mackenzie estimates U.S. residential solar installations will fall 18% in 2026.

Sunrun’s numbers showed that trend already in motion. The company added 17% fewer subscribers in Q4 2025 versus Q4 2024, and the net value of each new customer dropped 30% in the quarter. Its 2026 guidance didn’t help sentiment either — Jefferies analyst Julien Dumoulin-Smith downgraded the stock to Hold from Buy, citing expectations for “a more prolonged period of market contraction.”

First Solar’s Backlog Tells a Troubling Story

First Solar’s backlog fell to 50.1 gigawatts at the end of 2025, down from 68.5 gigawatts at the start of the year.

The company had more cancellations and terminated contracts than new bookings in the quarter — the seventh consecutive quarter of sequential backlog decline, according to Raymond James analyst Bobby Zolper.

Zolper noted that 2026 and 2027 guidance missed prior expectations by roughly 15% across shipment volumes, sales, and EBITDA. He kept a Market Perform rating and said he’d prefer to “wait out the near-term negatives.”

SolarEdge’s Own Numbers Were Mixed

Despite the stock drop, SolarEdge actually beat estimates in Q4. It reported an EPS loss of $0.14, 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. Net margin sits at -34.2% and return on equity at -45.5%.

Analyst sentiment on SEDG skews negative. The current consensus is “Reduce,” with one Buy, 16 Holds, and seven Sell ratings. The average price target is $27.28 — below where the stock currently trades.

Recent analyst moves 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.

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