Barclays analysts adjusted their rating for SolarEdge Technologies (NASDAQ:SEDG), downgrading it from Equalweight to Underweight, and reduced the price target from $74.00 to $50.00.
The analysts’ comments are based on a comparative analysis with Enphase Energy (ENPH), indicating that SolarEdge is currently trading at a higher valuation than Enphase. After revising their figures, the analysts observe that SolarEdge is trading at a three-turn premium compared to Enphase based on the estimated 2025 earnings per share (EPS), and approximately two turns higher on the 2025 estimated enterprise value to EBITDA (EV/EBITDA) ratio.
Considering the anticipated stronger recovery for Enphase, along with its higher gross margins, the analysts argued that the valuation dynamics should be reversed, with Enphase meriting a higher trading premium than SolarEdge.