What happened 

Shares of SolarEdge Technologies Inc (NASDAQ:SEDG) fell as much as 12.8% in trading Monday after being downgraded by an analyst. Shares closed the day down 12.6% on more than double the average volume of the last 30 days. 

So what

Gus Richard, an analyst at Northland Capital Markets, downgraded SolarEdge's stock from an outperform rating to a market perform rating and put a $102 price target on the stock. 

Home with rooftop solar array.

Image source: Getty Images.

Even after today's drop, SolarEdge's stock is still up 128%, so a pullback from those big gains is common even if shares continue to move up long-term. It also didn't help that the stock market was down big today and a highly volatile stock like SolarEdge often outpaces what the market does. 

Now what

Stocks can swing wildly after an analyst upgrade or downgrade, but in the long term a stock's rating doesn't determine its performance. Underlying fundamentals are more important for investors and nothing changed today, so in that sense, this is a buying opportunity. 

SolarEdge has proven to be one of the fastest-growing energy stocks on the market and a key cog in the solar industry. For that reason, it's a good stock to have on your watchlist, even if today isn't the day to jump into shares. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.