SolarEdge (SEDG) Valuation After Tax Credit Jitters and Rising European Storage Demand
SolarEdge Technologies (SEDG) just slid nearly 10% after investors digested news that U.S. residential solar tax credits could expire after 2025, even as the company highlighted rising demand for its new CSS-OD storage system in Europe.
See our latest analysis for SolarEdge Technologies.
That sharp drop sits against a very different backdrop, with a year to date share price return of around 116% and a 1 year total shareholder return near 150%. This suggests momentum has been rebuilding even as policy risks keep volatility elevated.
If this kind of policy driven move has you rethinking solar exposure, it could be a good moment to explore other high growth tech and AI stocks that are shaping the next wave of energy and infrastructure technology.
With the stock still trading at a modest discount to analyst targets despite a huge rebound, is SolarEdge now an undervalued turnaround story, or is the market already looking past today’s policy jitters and pricing in tomorrow’s growth?
Most Popular Narrative Narrative: 3.8% Undervalued
With SolarEdge closing at $31.94 against a narrative fair value near $33.22, the valuation case leans slightly in investors’ favor and hinges on a specific growth path.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 170.8x on those 2028 earnings, up from -1.1x today. This future PE is greater than the current PE for the US Semiconductor industry at 30.1x.
Curious why a loss making business could still command a premium style earnings multiple in a few years? The narrative leans on aggressive revenue growth, a swing back to profitability, and margin repair that would radically reshape today’s numbers. Want to see exactly how those assumptions stack up to reach that fair value?
Result: Fair Value of $33.22 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, extended U.S. tax incentives and faster storage adoption could bolster margins and demand, turning today’s cautious expectations into a potential upside surprise.
Find out about the key risks to this SolarEdge Technologies narrative.
Build Your Own SolarEdge Technologies Narrative
If you are not fully aligned with this view, or want to dig into the numbers yourself, you can build a custom narrative in just a few minutes, Do it your way.
A great starting point for your SolarEdge Technologies research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
Ready for your next investing move?
Before the market’s next swing leaves you on the sidelines, use the Simply Wall Street Screener to uncover fresh ideas that match your strategy and risk appetite.
- Target reliable income by reviewing these 15 dividend stocks with yields > 3% that may help anchor your portfolio with steady cash flows.
- Position for the next technology shift by scanning these 26 AI penny stocks shaping breakthroughs in automation and intelligent software.
- Secure potential bargains by focusing on these 912 undervalued stocks based on cash flows where prices have not yet caught up with underlying cash flows.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com