We lower our fair value estimate for SolarEdge to $75 from $147 following the company’s third quarter results and updated outlook. Our reduced valuation is driven by lower long-term revenue and gross margin expectations, coupled with reduced operating leverage. Our no-moat and Very High Uncertainty ratings are unchanged. We view shares as fairly valued.
SolarEdge is the largest inverter manufacturer in the world based on revenue and has a consistent record of profitability.
SolarEdge's mix shift toward commercial solar and battery storage products could weigh on gross margins.
|
Metric
|
SEDG
|
ENPH
|
TSLA
|
|---|---|---|---|
Price/Earnings (Normalized) | 10.53 | 19.84 | 66.34 |
Price/Book Value | 1.88 | 14.33 | 14.20 |
Price/Sales | 1.37 | 5.70 | 8.67 |
Price/Cash Flow | 10.58 | 19.33 | 47.77 |
|
Metric
|
SEDG
|
ENPH
|
TSLA
|
|---|---|---|---|
Quick Ratio | 2.37 | 3.03 | 1.07 |
Current Ratio | 3.84 | 3.36 | 1.69 |
Interest Coverage | — | 70.05 | 85.96 |
|
Metric
|
SEDG
|
ENPH
|
TSLA
|
|---|---|---|---|
Return on Assets (Normalized) | 8.91% | 19.63% | 14.67% |
Return on Equity (Normalized) | 16.92% | 72.31% | 26.48% |
Return on Invested Capital (Normalized) | 11.35% | 27.28% | 21.64% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|
FSLR
| First Solar Inc | Xxp | $17.1 Bil | |
ENPH
| Enphase Energy Inc | Pbbr | $14.5 Bil | |
XNYIF
| Xinyi Solar Holdings Ltd | Rsv | $5.0 Bil | |
XISHY
| Xinyi Solar Holdings Ltd ADR | Nyhy | $5.0 Bil | |
GCPEF
| GCL Technology Holdings Ltd | Khy | $3.7 Bil | |
RUN
| Sunrun Inc | Tpvpf | $3.1 Bil | |
NXT
| NEXTracker Inc Ordinary Shares - Class A | Cxmxv | $2.6 Bil | |
SHLS
| Shoals Technologies Group Inc Ordinary Shares - Class A | Zqzy | $2.5 Bil | |
SPWR
| SunPower Corp | Rznqm | $844.4 Mil |
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