The latest analyst coverage could presage a bad day for SolarEdge Technologies, Inc. (NASDAQ:SEDG), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the most recent consensus for SolarEdge Technologies from its 33 analysts is for revenues of US$1.4b in 2025 which, if met, would be a huge 30% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 82% to US$5.22. However, before this estimates update, the consensus had been expecting revenues of US$1.8b and US$3.56 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The consensus price target fell 27% to US$19.99, implicitly signalling that lower earnings per share are a leading indicator for SolarEdge Technologies' valuation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that SolarEdge Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 23% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 19% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that SolarEdge Technologies is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at SolarEdge Technologies. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for SolarEdge Technologies going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.