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SolarEdge Technologies (NasdaqGS:SEDG) Q3 2020 Earnings Prep

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SolarEdge Technologies, Inc. (NasdaqGS:SEDG) is scheduled to report Q3 earnings results after markets close for trading on November 2, 2020.

The company is expected to report earnings of $0.85/share on revenue of $342.4 million. The consensus earnings per share (EPS) of $0.85/share is based on a poll of 13 analysts and represents a decline in eps of −29.8% over the same quarter last year, when the company reported earnings of $1.21/share.

The revenue forecast of $342.4 million based on a poll of 14 analysts implies a year-over-year (YoY) decline in revenue of −16.6%. Last year the company reported $410.6 million in revenue for the quarter.

Expected to report EPS contraction of −29.8% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $342.36 $410.56 −16.6%
EPS $0.85 $1.21 −29.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from SolarEdge Technologies, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.71 $0.97 37.4% Beat
Q1, 2020 $1.27 $0.95 −25.4% Missed
Q4, 2019 $1.25 $1.65 31.5% Beat
Q3, 2019 $1.13 $1.21 6.9% Beat
Q2, 2019 $0.83 $0.94 13.5% Beat
Q1, 2019 $0.57 $0.64 12.8% Beat
Q4, 2018 $0.69 $0.63 −8.8% Missed
Q3, 2018 $0.82 $0.86 4.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 12.0%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 3, 2020 $175.10 $196.15 12.0% Increase
May 6, 2020 $107.86 $109.74 1.7% Increase
February 19, 2020 $108.38 $142.20 31.2% Increase
November 6, 2019 $83.27 $79.90 −4.0% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −3.05, the model suggests that the company is not likely to be an earnings manipulator. A value of −3.05 implies a 0.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

SolarEdge Technologies, Inc. is currently trading at $273/share, down −3.5% for the day. The company is trading at approximately 85.9% of its 52-week high of $317.88/share. The company’s stock price is up 39.2% since the last earnings report and down −11.9% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 55.21 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:SEDG Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 78.94 and a forward P/E multiple of 67.87.

SolarEdge Technologies, Inc.’s current share price also implies a price-to-book (P/B) multiple of 14.79. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $273
P/E Ratio 78.9x
P/E Ratio (Fwd) 67.9x
PEG Ratio 1.7
Total Debt / Total Capital 0.3%
Levered Free Cash Flow $214.8 million
EV / EBITDA 48.7x

Finbox

SolarEdge Technologies, Inc. is a large-cap stock with a market capitalization of $13.682 billion and a total enterprise value of $13.137 billion. The company operates in the Information Technology sector and the Semiconductors & Semiconductor Equipment industry.

SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations worldwide. Its SolarEdge system consists of inverters, power optimizers, communication devices, smart energy management solutions, and a cloud-based monitoring platform. The company’s products are used in a range of solar market segments, such as residential, commercial, and small utility-scale solar installations. It also provides pre-sales support, ongoing trainings, and technical support and after installation services; and lithium-ion cells, batteries, and energy storage solutions for various industries, including energy storage systems, residential and commercial solar systems, uninterruptible power supplies, electric vehicles, aerospace, marine, and others. The company sells its products to the providers of solar PV systems; and solar installers and distributors, electrical equipment wholesalers, and PV module manufacturers, as well as engineering, procurement, and construction firms. SolarEdge Technologies, Inc. partnership with Schneider Electric to develop the residential solar market and provide homeowners with seamless energy management for smart homes of the future. SolarEdge Technologies, Inc. was founded in 2006 and is headquartered in Herzliya, Israel.

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