SolarEdge Technologies Jumps 6x Since 2018 On Rising Sales And Investor Expectations

SEDG: SolarEdge Technologies logo
SEDG
SolarEdge Technologies

SolarEdge Technologies Inc. (NASDAQ: SEDG) stock price rose over 6x from $35 in 2018 end to around $239 currently, primarily due to favorable changes in its sales and P/S multiple. During this period, the company witnessed a stellar 136% rise in revenues, and combined with a 179% rise in its P/S multiple, the company’s stock price has rallied despite a rise in the outstanding share count. Further, over the same period, the S&P 500 returned around 65%, meaning that SEDG stock has managed to strongly beat the index since 2018-end.

In our interactive dashboard, Why SolarEdge Technologies Stock Moved: SEDG Stock Has Gained 582% Since 2018, we break down the factors behind this move.

(A) SEDG’s Total Revenue has grown 136% from $900 million in FY 2018 to $2.2 billion on an LTM basis

  • SEDG’s total revenue has risen consistently from $900 million in FY ’18 to $2 billion in FY ’21, and currently stands higher at $2.2 billion on an LTM basis.
  • SolarEdge is a provider of power optimizer, solar inverter, and monitoring systems for photovoltaic arrays.
  • SEDG’s largest segment is the solar segment, bringing in $1.79 billion as of FY ’21, making up around 91% of the company’s total sales.
  • For additional details about SEDG’s revenues and comparison to peers, see SolarEdge Technologies (SEDG) Revenue Comparison
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(B) Revenue per share (RPS) increased 100% from $20.73 in 2018 to $41.43 currently

  • SEDG’s revenue rose from $900 million in 2018 to $2.2 billion currently, while the outstanding share count rose from 45.2 million in 2018 to around 53.4 million currently.
  • Due to this, RPS has jumped 2x from $20.73 in FY ’18 to $41.43 currently.

(C) Price-To-Sales (P/S) multiple for SEDG rose strongly from 2.1x in 2018 to 12.1x by 2020 end, but has pulled back to 5.8x currently, still over 2x higher than its 2018 level

  • SEDG’s P/S multiple rose strongly to around 12.1x by late 2020, on the back of rising investor expectations surrounding increased solar energy adoption, leading to a rise in the company’s sales.
  • However, due to the current geopolitical tensions and increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 5.8x.
  • For additional details about the company stock returns and comparison to peers, see SolarEdge Technologies (SEDG) Stock Return Comparison.

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Returns May 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 SEDG Return -4% -14% 1839%
 S&P 500 Return -5% -18% 75%
 Trefis Multi-Strategy Portfolio -7% -23% 204%

[1] Month-to-date and year-to-date as of 5/18/2022
[2] Cumulative total returns since the end of 2016

 

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