Shares of SolarEdge Technologies Inc (SEDG 0.96%) 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.
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.
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.
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.