SolarEdge Technologies Stock Has Jumped More Than 8x Since 2017- Here’s Why

SEDG: SolarEdge Technologies logo
SEDG
SolarEdge Technologies

SolarEdge Technologies Inc. (NASDAQ: SEDG) stock price rose over 8x from $37 in 2017 end to around $313 currently, primarily due to favorable changes in its sales. During this period, the company witnessed a stellar 305% rise in revenues, and combined with a 107% 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 a little less than 50%, meaning that SEDG stock has managed to strongly beat the index since 2017-end.

In our interactive dashboard, Why SolarEdge Technologies Stock Moved: SEDG Stock Has Gained 734% Since 2017, we break down the factors behind this move.

(A) SEDG’s Total Revenue has grown 305% from $600 million in FY 2017 to $2.5 billion on an LTM basis

  • SEDG’s total revenue has risen consistently from $600 million in FY ’17 to $2 billion in FY ’21, and currently stands higher at $2.5 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 207% from $14.35 in 2017 to $44.05 currently

  • SEDG’s revenue rose from $600 million in 2017 to $2.5 billion currently, while the outstanding share count rose from 42.3 million in 2017 to around 55.9 million currently.
  • Due to this, RPS has jumped 3x from $14.35 in FY ’17 to $44.05 currently.

(C) Price-To-Sales (P/S) multiple for SEDG rose strongly from 3.4x in 2017 to 12.1x by 2020 end, but has pulled back to 7.1x currently, still over 2x higher than its 2017 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 7.1x.
  • For additional details about the company stock returns, and comparison to peers, see SolarEdge Technologies (SEDG) Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Sep 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 SEDG Return 13% 11% 2413%
 S&P 500 Return 0% -17% 77%
 Trefis Multi-Strategy Portfolio 1% -14% 239%

[1] Month-to-date and year-to-date as of 9/13/2022
[2] Cumulative total returns since the end of 2016

 

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