SolarEdge Stock Falls As Analysts React To $300 Million Private Offering

Analysts from Goldman Sachs and Truist updated coverage on SolarEdge Technologies, Inc. SEDG following the company’s announcement of a private offering of $300 million in convertible notes.

The Details:

Both research firms noted SolarEdge significantly lowered its second-quarter free cash flow guidance in the proposed offering's filing.

SolarEdge now expects negative free cash flow of $150 million for the second quarter, well-below the Street estimate of $216 million in positive free cash flow. SolarEdge cited certain discretionary minority investments, extensions of credit provided to certain customers, higher than expected working capital related to the ramp of U.S. manufacturing and a slower pace of payments on accounts receivable as reasons for negative free cash flow outlook. 

Goldman Sachs maintained its Sell rating and price target of $49 on the stock, and Truist maintained SolarEdge with a Hold rating and $60 price target. 

Other analysts have updated price targets on SolarEdge following the proposed offering: 

• JP Morgan analyst Mark Strouse maintained SolarEdge Technologies with an Overweight rating and lowered the price target from $59 to $49.
• Scotiabank's Tristan Richardson maintained a Sector Perform rating and lowered the price target from $72 to $46.
• Canaccord Genuity maintained its Hold rating on SolarEdge and lowered the price target from $58 to $38.

Related News: Rivian Cuts Costs By 35%: What’s Going On With Rivian’s Stock?

SEDG Price Action: According to Benzinga Pro, SolarEdge Technologies shares are down 20.4% at $26.48 at the time of publication Tuesday.

Image: Shutterstock