SolarEdge Technologies manufactures and supplies DC optimized inverter systems for solar PV installations. The company was founded in 2006 and is based in Hod Hasharon, Israel.
SEDG Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Solaredge Technologies Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Solaredge Technologies Inc ranked in the 96th percentile in terms of potential gain offered. Our DCF model suggests the stock is undervalued by 10704.5%; returns of such proportions should be viewed with some skepticism, though. In terms of the factors that were most noteworthy in this DCF analysis for SEDG, they are:
The compound growth rate in the free cash flow of Solaredge Technologies Inc over the past 4.97 years is 2.78%; that's better than 95.17% of cash flow producing equities in the Technology sector, where it is classified.
The business' balance sheet suggests that 0% of the company's capital is sourced from debt; this is greater than merely 3.11% of the free cash flow producing stocks we're observing.
SEDG's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 57.85% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Solaredge Technologies Inc? See SNE, SCWX, PRSP, OKTA, and ZMTP.
Investment Thesis Despite the large increases in valuation among renewable energy sector generally and some of the solar energy companies specifically, we continue to believe that the investments remain attractive. Renewable energy tailwinds are massive, especially for solar. SEDG is trading near the PEG adjusted multiples of the SP500 based...
John D. Edwards CFA on Seeking Alpha | September 23, 2020
B.Riley initiated SolarEdge Technologies ([[SEDG]] +5.1%) with a Buy rating, PT $254 indicating a 31.5% upside from current levels.YTD, the stock has gained 95%; quick look at its 6 months performance vs. peers and broader indexAnalyst Christopher Souther sees SolarEdge as the best positioned company to "address multiple end markets...