**Overview:**
SolarEdge is a photovoltaic (*PV*) *i*nverter and solar energy company.
The company has seen a meteoric rise and subsequent downfall within the past 5 years.
https://preview.redd.it/0gnxj53xakae1.png?width=682&format=png&auto=webp&s=42ce8c04973f28b7cce3b38430cc903a75ef5e7e
**To summarize the events leading up to this:**
A growing market demand for PV inverter systems, together with a growing market share of SEDG in that sector, led to consistently increased earnings over several years, from 300mil quarterly revenue in 2020 to 900mil quarterly revenue in 2023, which skyrocketed the stock price.
Mismanagement of market conditions led to an equally devastating crash.
Management was not able to foresee decline in sales and purchasing due to rising inflation and corona virus market recession. It aggressively expanded its factories, acquisitions, and employees, leading to a significant increase in company expenses.
Meanwhile quarterly revenue dropped from 990m to 715m to 316m in the next 2 quarters.
All solar energy companies were hit by a big decrease in revenue, and a stock pile of unsold products.
This was especially painful for Solaredge which aggressively expanded, unable to see the forthcoming recession in solar market.
https://preview.redd.it/aqseg3tkekae1.png?width=801&format=png&auto=webp&s=44429395651bbd5cd32353fd0409f41122fcb79c
**My Analysis:**
**Risks:**
Solaredge $350m bond due end of 2025
Solardge negative income for the past 5 quarters.
Trump policies may rollback subsidies and rules favor solar energy sector
Stock is volatile and many gains are shorted lived. Combined with a negative outlook for stocks in January, will see a difficult time in stock price to go up.
**Pros:**
Solaredge revenue has been stable at around $260m for the past 3 quarters.
The only thing required for the company to become profitable is to cut expenses.
Over the past year, Solaredge has taken many cost-cutting measures, including headcount and facility reductions.
**My belief is that Solaredge will turn profitable in 2025q1 (february), or at the latest 2025q2.**
**Share value will double in 2025, because the company trading much lower than it's fair market value, and many open hedge position.**
**Positive indicators:**
1. SolarEdge insider trading is up, and board members have been buying shares since November. Independent Chairman, *Avery More*, recently bought a whopping $1.1m worth of stock, at a price of $13.65.
2. Most recent target price set by Goldman Sachs, on Dec 20th, double upgraded SolarEdge (SEDG) to Buy from Sell with a $19 target price. (Todays SEDG price is $13.60)
3. SolarEdge has taken many cost reduction measures in the past year.
4. SolarEdge is currently hiring new employees in R&D departments. This is a strong indication the company feels financially secure about its future.
5. Solaredge is rumored to have another round of layoffs in non R&D departments - another indicator of increasing efficiency and reducing operating expenses.
6. Sale of §45X Advanced Manufacturing Production Tax Credits in consideration for approximately $40 million, will provide liquidity and strengthen solaredge cash position.
7. The company forecasts fourth-quarter 2024 revenues of $180 million to $200 million. Given the revenue of the past 4 quarters (260m on average), as seen in chart above, the company should be able to beat expectations on it's upcoming quarterly report.
**TLDR:**
Solaredge is traded at half it's fair market value.
Solaredge has reduced expenses significantly, and is very likely to return to profitability in the next two quarters of 2025.
**Final notes:**
Assume everything I have said is inaccurate. Do the research for yourself.
Don't take this as financial advice. The stock can go up today 10% and down 20% tomorrow.
The company is still at a very volatile point, and waiting for a profitable quarter before investing is the safe thing to do.
**YOLO** My entire portfolio into SEDG:
[YOLO SEDG](https://preview.redd.it/kju112135lae1.png?width=1390&format=png&auto=webp&s=1a6610c60de576c50746d1fe853d7f20f55deb01)