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SolarEdge Technologies
SEDG-Q
DON'T BUY
Dec 20, 2023
$94.870
Stock price when the opinion was issued
Energy
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DON'T BUY
They just delayed their new battery launch and got slammed for it with downgrades and stock sell-offs. He prefers First Solar, the best in this industry. A Biden White House would be a tailwind to the sector.
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The solar sector got hit hard in 2023 with rising inflation and rates, government subsidies ending, and general aversion to the sector after some high flying years and high valuations. Specifically to SEDG, the company has guided lower several times this year. Investors are worried that a bad slump in demand, especially in Europe, could worsen and/or last longer than expected. The rapid (negative) change in volumes and margins likely means very weak to negative earnings growth for some time. EPS is expected to go from $3.90 this year to less than $1 next year. Cash flow has also dwindled to $71M this year from more than $200M in 2019 to 2021. The balance sheet is fine with about $700M net cash.
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