This report is an updated version of the report published on 7 January 2025 at 3:55 PM EST.

SolarEdge Technologies, Inc. (NASDAQ: SEDG)  

SEDG provides inverter solutions for solar photovoltaic (PV) systems. The company's essential products include SolarEdge Inverter, SolarEdge Power Optimizer, SolarEdge Solutions, and SolarEdge Monitoring Software.

Recommendation Rationale – SELL at USD 18.51 

• Financial Highlights: Revenues for 3QFY24 declined by 64.03% YoY, falling to USD 260.90mn from USD 725.31mn in 3QFY23. Operating loss increased to USD 1,085.27mn in 3QFY24, compared to USD 16.73mn in the same period last year.
• Trading Near the Resistance: SEDG’s share price has surpassed its R2 level recommended on 17 December 2024. Therefore, share price can face resistance at the current levels.
• Overvalued Multiples: On a forward 12-month basis – key trading multiple (Price/Cash Flow) is higher than the median of Energy sector.
• Market Risk: SEDG has experienced revenue declines and missed financial estimates in recent quarters. This poor financial performance can impact investor confidence and the company’s ability to raise capital. As a company involved in solar power technology, SolarEdge faces risks related to the execution of its corporate strategy and operational activities.

SEDG’s Daily Price Chart

Valuation Methodology: EV/Sales Approach (FY December'25E) (Illustrative)

SEDG is expected to trade at discount based on decreased revenue in 3QFY24, increased net loss in 3QFY24, higher operating loss in 3QFY24, and increasing cash outflows. For conducting the valuation, the following peers have been considered: Daqo New Energy Corp (NYSE: DQ), Maxeon Solar Technologies Ltd (NASDAQ: MAXN), JinkoSolar Holding Co Ltd (NYSE: JKS), and others have been considered.

Considering the current trading levels, risks associated, and volatile market conditions on the back of higher interest rates, a ‘Sell’ rating is assigned to the ‘SEDG’ at the current market price of USD 18.51 as of 7 January 2025 (10:25 AM EST).

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 7 January 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.