SolarEdge Technologies may be overvalued with poor growth indicators, but the 27 analysts following the company give it an average rating of buy. The analysts have set target prices ranging from $305.0 to $452.0 per share, for an average of $366.5. At today's price of $290.71, SolarEdge Technologies is trading -20.68% away from its average target price, suggesting there is an analyst consensus of strong upside potential.
SolarEdge Technologies, Inc. designs, develops and sells optimized direct current (DC) inverter systems for solar photovoltaic (PV) installations worldwide.
SolarEdge Technologies has a trailing twelve month P/E ratio of 181.69, compared to an average of 27.16 for the Technology sector. Based on its EPS guidance of 11.61, the company has a forward P/E ratio of 25.04. Based on the average annual growth rate of SolarEdge Technologies's historical and projected earnings per share, which is 114.2%, the company's PEG ratio is 1.59. This suggests that these shares are overvalued.
Furthermore, SolarEdge Technologies is likely overvalued compared to its book value, since its P/B ratio of 9.14 is higher than the sector average of 6.23.
Why would analysts be giving such an overvalued stock a good rating? It's possible that analysts are looking beyond common valuation metrics and taking into account the company's responsible use of debt to operate its business. They likely put significant weight behind SolarEdge Technologies's growth potential, as signaled by its 29.49% rate of revenue growth and capital expenditures that are growing at 38.77%.
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $1,426 | $1,459 | $1,964 | $3,110 |
| Revenue Growth | n/a | 2.36% | 34.58% | 58.38% |
| Gross Margins | 33.62% | 31.62% | 32.04% | 27.16% |
| Gross Margins Growth | n/a | -5.95% | 1.33% | -15.23% |
| Operating Margins | 13.32% | 9.77% | 10.55% | 5.34% |
| Operating Margins Growth | n/a | -26.65% | 7.98% | -49.38% |
| Earnings Per Share | $2.8 | $2.66 | $3.04 | $1.67 |
| EPS Growth | n/a | -5.0% | 14.29% | -45.07% |
| Diluted Shares (MM) | 52 | 53 | 56 | 56 |
| Free Cash Flow (MM) | $186 | $96 | $65 | -$138 |
| FCF Growth | n/a | -48.58% | -32.32% | -312.79% |
| Capital Expenditures (MM) | $73 | $127 | $149 | $169 |
| LT Debt to Equity | 0.53 | 1.43 | 0.31 | 0.58 |
