Markets

Why SolarEdge Technologies' Shares Popped 12.1% on Wednesday

What happened 

Shares of SolarEdge Technologies (NASDAQ: SEDG) had another great day today, gaining as much as 12.1% in a steady climb throughout the day. Shares were hitting their daily highs as I'm writing this at 2:35 p.m. EDT. 

So what

Yesterday's jump in SolarEdge's shares was because of second-quarter earnings that came in better than the market's very low expectations. Revenue grew just 2%, but the company increased profits by 11.5%

Large roof with solar panels on a partly cloudy day

Image source: Getty Images.

The news today was that analysts at Oppenheimer increased their price target for SolarEdge's stock to $207 per share and reiterated a buy rating. Ironically, shares blew through that price target today. 

Now what

I wouldn't read too much into the analyst upgrade today, although such events can drive a stock higher short term. The bigger news was yesterday's earnings and even competitor Enphase Energy reporting a solid quarter after the market closed yesterday. 

What I would take from Enphase's report was that revenue fell at Enphase while it grew for SolarEdge, indicating strength in the solar market for SolarEdge. But it'll take a few quarters to see if that trend continues, especially as Enphase tries to enter the storage market, where SolarEdge sees a bright future and a way to expand its presence in renewable energy

Chalk up today's move as another earnings-fueled bump with a little help from an analyst upgrade. 

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Travis Hoium has no position in any of the stocks mentioned. The Motley Fool recommends SolarEdge Technologies. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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