In this article, we will take a look at the 5 best depressed stocks to buy now. To see more such companies, go directly to 14 Best Depressed Stocks To Buy Now.
5. SolarEdge Technologies, Inc. (NASDAQ:SEDG)
Number of Hedge Fund Holders: 43
SolarEdge Technologies, Inc. (NASDAQ:SEDG) ranks 5th in our list of the best depressed stocks to buy now according to hedge funds. Last month SolarEdge Technologies, Inc. (NASDAQ:SEDG) fell to new lows after Bank of America downgraded the stock to Neutral from Buy with a $181 price target, down from $320. Bank of America’s Julien Dumoulin-Smith said SolarEdge Technologies, Inc. (NASDAQ:SEDG) is “caught in the perfect storm of sector headwinds.”
Answering a question during Q2 earnings call, SolarEdge Technologies, Inc. (NASDAQ:SEDG)’s management talked about its expectations in 2024:
“What we see right now, especially in Q3 and Q4 is the fact that the US market that is correcting right now, which is usually characterized with high resi and higher margins, by the way, compared to other regions, is slowing down very much, which, of course, impact negatively the margin. And at the same time, Europe is growing. And the commercial side is also growing. And this is also something that takes us a little bit down because the portion of commercial compared to residential in our overall mix, at least in Q3, Q4 is higher than we anticipated or anticipate to see.
If you combine these, the expectation should be that, in 2024, where we believe that, first of all, Europe will come back to course much quicker than the United States and we will also see, of course, again, there an increase in residential. Plus the fact that the US market that contributes to margin very nicely is also going to go up within, I don’t know, two, three, four quarters, but this is still within 2024, yes, we do expect that 2024 margins should come back to levels that we’ve seen, at least in the last quarters. With that said, again, the major ace is going to be here batteries because we do see that battery prices continue to go down at least right now. And as we’ve mentioned before, batteries target gross margin should be around 25%.
So even if today or in some quarters it’s higher than this, I’m not sure that this will persist. So I would cautiously say that 2024 should be, of course, first of all, back in the model, by the way, which we also believe that this may be the case even this year as well for the next two quarters. And second is that, yes, there are some drivers that suggest that 2024 can be on the upside part of it rather than on the downside part of it.”
Read the complete earnings call transcript here.
