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SolarEdge Technologies (SEDG)
NASDAQ:SEDG
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SolarEdge Technologies
(NASDAQ:SEDG)
54Neutral
Positive Factors
Financial Performance
SolarEdge reported top-line results and second-quarter guidance that were higher than the Street’s expectations.
Market Demand
Market demand for inverters continued its recovery, with SolarEdge shipping significantly more units to customers, especially in North America.
Operational Efficiency
SolarEdge has focused on operational efficiency, reducing headcount and divesting from unprofitable assets, generating substantial cost savings.
Negative Factors
Free Cash Flow
SolarEdge now expects free cash flow to be breakeven during FY25, down from prior guidance of positive driven by tariffs.
Pricing and Sales
SolarEdge’s blended average selling price decreased by 17% quarter-over-quarter to spur higher levels of demand, highlighting the challenges to offload inventory in a difficult demand environment.
Tariffs
Management provided guidance reflecting the company's tariff exposure in China with a significant hit to gross profit expected next quarter.
SolarEdge Technologies (SEDG) vs. S&P 500 (SPY)
Market Cap
$1.30B
Dividend YieldN/A
Average Volume (3M)5.09M
Price to Earnings (P/E)―
Beta (1Y)1.24
Revenue Growth-57.89%
EPS Growth-559.87%
CountryUS
Employees3,961
SectorTechnology
Sector Strength76
IndustrySolar
Share Statistics
EPS (TTM)-1.14
Shares Outstanding59,044,230
10 Day Avg. Volume7,703,104
30 Day Avg. Volume5,091,929
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)1.73
Price to Sales (P/S)0.00
P/FCF Ratio-3.05
Enterprise Value/Market Cap1.27
Enterprise Value/Revenue0.29
Enterprise Value/Gross Profit-1.96
Enterprise Value/Ebitda-0.42
Forecast
1Y Price Target
$14.75Price Target Upside-33.02% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering22
SolarEdge Technologies Business Overview & Revenue Model
Company DescriptionSolarEdge Technologies, Inc. is a leading company in the solar energy sector, specializing in smart energy solutions. The company designs, develops, and sells an intelligent inverter solution that maximizes power generation at the individual solar module level while lowering the cost of energy produced by the solar photovoltaic system. SolarEdge's product offerings include photovoltaic inverters, power optimizers, solar panels, and battery storage solutions, serving residential, commercial, and industrial markets worldwide.
How the Company Makes MoneySolarEdge Technologies makes money primarily through the sale of its solar power optimization products and systems. The company's core revenue stream comes from the sale of its DC optimized inverter systems, which include inverters, power optimizers, and related products. These products are sold to solar installers and distributors who then deploy them in residential, commercial, and industrial solar energy projects. Additionally, SolarEdge generates income from its growing energy storage solutions, which include batteries and energy management software, catering to the increasing demand for integrated solar energy systems. The company also benefits from strategic partnerships and collaborations with other energy and technology companies, which help to expand its market reach and drive sales growth.
SolarEdge Technologies Key Performance Indicators (KPIs)
Any
Optimizers Shipped
Measures the quantity of optimizers distributed, showcasing the adoption of technology that enhances solar panel efficiency and the company's innovation in solar energy management.
Measures the quantity of optimizers distributed, showcasing the adoption of technology that enhances solar panel efficiency and the company's innovation in solar energy management.
Data provided by:
Main Street Data
Main Street DataSolarEdge Technologies Financial Statement Overview
Summary
SolarEdge Technologies is facing significant financial challenges as evidenced by negative profitability and cash flow metrics. The company's leverage is moderate, but the declining equity and negative cash flow raise concerns about sustainability. It is crucial for the company to address cost control and explore revenue growth opportunities to stabilize its financial position.Income Statement
The income statement for SolarEdge Technologies shows a concerning trend, with a significant decrease in revenue from 2023 to 2024 and negative profitability metrics in 2024. Gross Profit Margin and Net Profit Margin were negative, indicating that the company is not only losing money but also struggling with cost control. Historical data shows fluctuating revenue with a notable decline in 2024, impacting gross and net profitability margins.35
Negative
Balance Sheet
The balance sheet reflects moderate financial stability with a Debt-to-Equity Ratio of 1.13 in 2024, suggesting moderate leverage. However, the company's equity has decreased over the years. Return on Equity (ROE) is negative in 2024, indicating inefficiency in using shareholders' equity to generate profit. The Equity Ratio is 0%, reflecting a potential concern in the asset structure.55
Neutral
Cash Flow
SolarEdge Technologies is experiencing negative Free Cash Flow and Operating Cash Flow in 2024, which suggests liquidity challenges. Despite previous years of positive operating cash flow, the recent trend shows a negative Free Cash Flow Growth Rate, highlighting potential issues in sustaining operations without external financing.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 901.46M | 2.98B | 3.11B | 1.96B | 1.46B | Gross Profit |
| -877.20M | 703.82M | 844.65M | 629.32M | 461.36M | EBIT |
| -1.71B | 40.20M | 166.12M | 207.14M | 142.56M | EBITDA |
| -1.64B | 142.49M | 237.63M | 237.44M | 206.06M | Net Income Common Stockholders |
| -1.81B | 34.33M | 93.78M | 169.17M | 140.32M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 585.89M | 860.04M | 1.02B | 697.82M | 1.03B | Total Assets |
| 2.63B | 4.59B | 4.27B | 2.90B | 2.44B | Total Debt |
| 757.35M | 735.30M | 732.27M | 713.68M | 662.61M | Net Debt |
| 482.74M | 396.83M | -50.84M | 183.59M | -164.54M | Total Liabilities |
| 1.97B | 2.18B | 2.09B | 1.59B | 1.35B | Stockholders Equity |
| 658.34M | 2.41B | 2.18B | 1.31B | 1.09B |
| Cash Flow | Free Cash Flow | |||
| -421.48M | -361.24M | -138.06M | 64.88M | 95.86M | Operating Cash Flow |
| -313.32M | -180.11M | 31.28M | 214.13M | 222.66M | Investing Cash Flow |
| 416.29M | -268.89M | -417.04M | -484.21M | -236.64M | Financing Cash Flow |
| -20.13M | -11.96M | 654.61M | -15.18M | 640.48M |
SolarEdge Technologies Technical Analysis
Positive
22.02
Price Trends
15.34
Positive
15.22
Positive
16.91
Positive
Market Momentum
1.79
Negative
66.23
Neutral
88.42
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEDG, the sentiment is Positive. The current price of 22.02 is above the 20-day moving average (MA) of 15.59, above the 50-day MA of 15.34, and above the 200-day MA of 16.91, indicating a bullish trend. The MACD of 1.79 indicates Negative momentum. The RSI at 66.23 is Neutral, neither overbought nor oversold. The STOCH value of 88.42 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SEDG.
SolarEdge Technologies Risk Analysis
SolarEdge Technologies disclosed 41 risk factors in its most recent earnings report. SolarEdge Technologies reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
SolarEdge Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $811.63M | 42.96 | 3.43% | ― | -18.10% | -36.91% | |
66 Neutral | $6.61B | 46.89 | 17.13% | ― | -22.15% | -45.22% | |
63 Neutral | $1.17B | ― | -49.11% | ― | -21.31% | -593.57% | |
63 Neutral | $967.88M | 118.10 | -9.49% | 15.33% | -30.26% | -156.69% | |
60 Neutral | $11.59B | 10.39 | -7.23% | 2.94% | 7.46% | -10.76% | |
60 Neutral | $726.54M | 20.05 | -0.39% | ― | -19.06% | -104.91% | |
54 Neutral | $1.30B | ― | -121.50% | ― | -57.89% | -559.87% |
* Technology Sector Average
Performance Comparison
SEDG
SolarEdge Technologies
20.76
-27.95
-57.38%
CSIQ
Canadian Solar
10.68
-5.03
-32.02%
ENPH
Enphase Energy
48.78
-64.67
-57.00%
JKS
JinkoSolar
18.96
-3.26
-14.67%
ARRY
Array Technologies
7.26
-3.48
-32.40%
SHLS
Shoals Technologies Group
4.72
-1.88
-28.48%
SolarEdge Technologies Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 70.43%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments in revenue growth, market share gains, and innovation, against challenges posed by new tariffs and pricing pressures. While SolarEdge is making significant strides in innovation and market leadership, the impact of tariffs and pricing challenges could weigh on future performance.Q1-2025 Updates
Positive Updates
Revenue and Market Share Growth
SolarEdge delivered quarter-over-quarter and year-over-year revenue growth, expanded gross margins, and reduced operating expenses. They also achieved their second straight quarter of positive free cash flow.
US Manufacturing and Market Leadership
SolarEdge created nearly 2,000 jobs in the U.S., reaching a capacity of 70,000 inverters per quarter. They were recognized as the number one inverter supplier for rooftop solar installations in the U.S.
Progress in Europe
Sell-through in Europe was up 6% quarter-over-quarter, with Germany and the Netherlands showing particular strength.
Innovation and New Product Launches
SolarEdge is on track with the new Nexis platform and announced the SolarEdge ONE Controller for Residential compliance with Germany's regulation 14a, opening significant market opportunities.
Negative Updates
Impact of Tariffs
Newly imposed tariffs are expected to reduce gross margins by 2% in Q2 and 4-6% in the second half of the year. Tariffs may also impact cash flow, leading to an expectation of approximately breakeven free cash flow for the full year.
Challenges in the U.S. Market
Sell-through in North America was down 18% quarter-over-quarter due to seasonality, with additional uncertainties due to potential policy changes and tariffs.
Decline in ASP per Watt
ASP per Watt was down 17% from Q4, driven by lower pricing in Europe and a lower optimizer to inverter ratio.
Company Guidance
In the SolarEdge conference call for the first quarter of fiscal year 2025, the company provided a comprehensive update on its financial performance and strategic priorities. SolarEdge reported total revenues of $219.5 million for Q1, with non-GAAP revenues at $212.1 million. The company achieved quarter-over-quarter and year-over-year revenue growth, expanded gross margins, and reduced operating expenses, resulting in a positive free cash flow for the second consecutive quarter. U.S. revenues were $132.1 million, while European revenues were $47.4 million. In terms of shipments, SolarEdge delivered approximately 1.2 gigawatts of total shipments, split evenly between commercial & utility products and residential. The company also shipped 180 megawatt-hours of batteries, primarily to Europe. Guidance for Q2 includes revenue expectations between $265 million and $285 million, with a non-GAAP gross margin ranging from 8% to 12%, accounting for a 2% impact from newly imposed tariffs. Additionally, SolarEdge highlighted progress in ramping up U.S. manufacturing and optimizing its supply chain to mitigate tariff impacts, while emphasizing its focus on strategic priorities such as strengthening financials, regaining market share, accelerating innovation, and ramping up U.S. manufacturing.SolarEdge Technologies Corporate Events
Executive/Board Changes
SolarEdge Technologies Announces Board Member Resignations
Neutral
Apr 10, 2025
On April 8, 2025, Marcel Gani resigned from SolarEdge Technologies‘ Board of Directors, and Dirk Hoke announced he would not seek re-election, stepping down after the 2025 Annual Meeting. Their departures were not due to disagreements with the company, and the board size was adjusted accordingly.
Spark’s Take on SEDG Stock
According to Spark, TipRanks’ AI Analyst, SEDG is a Neutral.
SolarEdge faces significant financial challenges, underscored by negative profitability and cash flow metrics, which are major concerns. Technical indicators show moderate short-term strength, but valuation metrics are unfavorable, reflecting market skepticism. The mixed outlook from the earnings call highlights both opportunities in innovation and challenges in financial losses. Strategic board expansions could provide future strategic advantages.
To see Spark’s full report on SEDG stock, click here.
Executive/Board Changes
SolarEdge Technologies Appoints New Chief Financial Officer
Neutral
Mar 3, 2025
On March 2, 2025, SolarEdge Technologies appointed Asaf Alperovitz as the new Chief Financial Officer, succeeding Ariel Porat who stepped down for personal reasons. Alperovitz, with extensive experience in finance and leadership roles across various industries, is expected to enhance SolarEdge’s financial strategy and performance, marking a significant transition in the company’s executive team.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.