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what it is
SolarEdge sells the hardware and software that help solar panels squeeze out more electricity and manage it safely.
how it gets paid
Last year Solaredge Tech made $1.2B in revenue. Residential solar systems was the main engine at $0.54B, or 45% of sales.
why it's growing
Revenue grew 31.4% last year to about $1.2B. Gross margin on the latest print here: 14.3%. Quarter revenue runs closer to ~$300M (roughly a fourth of the year), not $849M in one quarter on top of that base.
what just happened
Latest quarter revenue is roughly one-fourth of the ~$1.2B annual base (~$300M pace) — not $849M, which would blow up the annual math. Losses stayed ugly.
At a glance
C++ balance sheet — some cracks in the foundation
10/100 earnings predictability — expect surprises
n/m return on capital — loss year distorts ROC reads
xvary composite: 28/100 — weak
$0.50 fy2027 eps est
What they do
SolarEdge sells the hardware and software that help solar panels squeeze out more electricity and manage it safely.
SolarEdge is built into the guts of a solar system, not bolted on like an accessory. It has shipped 132.1 million optimizers and 5.8 million inverters as of 12/31/24, which means installers already know the gear and homeowners already live inside the software. Switching costs (changing vendors after installation) → ripping out core system parts → so what: leaving is expensive and annoying.
How they make money
$1.2B
annual revenue · their business grew +31.4% last year
Residential solar systems
$0.54B
Commercial solar systems
$0.30B
Utility-scale projects
$0.18B
Power optimizers
$0.12B
Software, monitoring, and other
$0.06B
The products that matter
solar power electronics
Solar Inverters and Optimizers
$1.2B revenue · essentially the whole business
this hardware line carries the revenue stream. when solar demand improves, you see it fast. when installers pull back or pricing gets ugly, you feel it almost everywhere at once.
core revenue line
Key numbers
$33
18-month target
Target price → a published fair-value estimate → so what: it sits about 19% below the current $40.6 stock price, so the rebound is already priced in.
−25.5%
operating margin
Operating margin → profit after core costs → −25.5% matches the loss-making headline (the KPI had dropped the minus sign).
$0.50
FY2027 EPS est
EPS estimate → expected profit per share → so what: even the 2027 forecast points to a thin recovery, not a profit machine.
$2.0B
FY2029 revenue
Revenue estimate → future sales → so what: the long-term bull case needs revenue to climb about $0.8B above today's $1.2B base.
Financial health
C++
strength
- balance sheet grade C++ — below average — limited financial resources
- risk rank 5 — safer than 5% of stocks
- price stability 5 / 100
- net profit margin negative / n/m — operating losses; ignore stale positive margin placeholders
- return on equity negative / n/m — not consistent with a −25.5% operating margin story
C++ — balance sheet grade needs watching; margin/ROE lines above were corrected for the loss year.
Total return vs. market
You invested $10,000 in SEDG 3 years ago → it's now worth $1,260.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
Quarter revenue ~$300M pace vs $1.2B year — comeback still came with ugly losses.
Gross margin reached 14.3%. EPS was −$2.21 versus −$1.15 expected — a deeper loss than hoped. The old $849M / +150% vs. prior year pair did not fit the annual bridge.
~$300M
quarter revenue (approx.)
−$2.21
eps (Q)
14.3%
gross margin
the number that mattered
The 14.3% gross margin matters most because margin recovery, not just revenue growth, decides whether this business can earn real money again.
-
solaredge continues to gradually recuperate its revenues.
-
in the december interim, for the fourth consecutive quarter, the solar company registered higher vs. prior year sales.this augurs well, considering the difficult environment all solar companies are operating in at the present time. revenues benefited from increased european sales, greater strength in the u.s. solar commercial sector, and some market-share gains in the residential arena, thanks to some solar lessors still being subsidized by the itc (investment tax credit).
-
annual losses should continue to narrow in 2026.
-
this is a result of stringent cost-cutting measures, lower interest rates, and a deepening partnership with infineon (ifnny), a leading german semiconductor manufacturer (which should allow for more shared costs).moreover, as a bloated inventory is gradually whittled away, pricing discipline ought to emerge among the major players in this field, namely, enphase (enph), sunrun (run), and sma (smtgf). greater revenues from a recuperation in europe, along with more commercial work in the u.s., should also help.
-
a profit is possible in 2027.this, however, is probably dependent on the itc not being terminated prior to this anticipated date. the trump administration is overtly hostile to any and all businesses associated with green renewable energy.
source: company earnings report, 2026
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What could go wrong
the core risk here is simple: SolarEdge needs a demand recovery, a margin recovery, and a policy backdrop that does not get worse. You are not betting on one fix. You are betting on several fixes lining up.
med
residential solar demand stalls again
the recent improvement leaned on better european demand, more u.s. commercial work, and some residential share gains. if that mix fades, the sales rebound loses its engine.
with essentially the full business tied to one hardware category, weak demand hits almost the entire $1.2B revenue base.
med
pricing pressure stays ugly
management needs bloated inventory to clear before pricing discipline returns across the major players, including enphase, sunrun, and sma. until then, margin recovery is a story about hope, not proof.
the latest quarterly margin was -34.2%. that is not a side issue. it's the operating reality.
med
investment tax credit support weakens
the current outlook explicitly ties a possible 2027 profit to the investment tax credit not being terminated early. that puts policy inside the earnings model.
if subsidy support fades, the path from -$6.88 full-year EPS toward -$0.45 gets harder to trust.
med
cost cuts and partnerships do not offset the damage
the recovery case leans on stringent cost cutting, lower rates, and a deeper infineon partnership. if one of those slips, the math gets worse fast.
this is a company with a C++ balance sheet and a 10/100 predictability score. you do not have much margin for misses.
one hardware line carries the business, so demand weakness, pricing pressure, and policy risk can pressure most of the $1.2B revenue base at the same time.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
quarterly revenue staying above $340M
one better quarter helps the mood. a recovery needs repeatability. if sales cannot hold here, the story gets much weaker fast.
risk
whether margin improves from -34.2%
revenue recovery is step one. margin recovery is the part that gets you back to actual earnings power.
calendar
the 2027 profit timeline
the current narrative points to possible profitability in 2027. each quarter should make that date look more believable or less.
trend
inventory clearing and pricing discipline
this industry does not heal until excess inventory shrinks and competitors stop cutting price just to move boxes.
Analyst rankings
short-term outlook
below average
momentum score 4 — in human-speak, analysts think this can still lag from here.
risk profile
high risk
stability score 5 — real drawdown risk, not just routine volatility.
chart momentum
average
technical score 3 — no clean trend signal, which is what you expect in a messy recovery.
earnings predictability
10 / 100
the earnings line is hard to model. if you own this, surprises come with the territory.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 95 buyers vs. 98 sellers in 4q2025. total institutional holdings: 63.7M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$13
$53
$41
current price
$33
target midpoint · 19% from current · 3-5yr high: $50 (+25% · 5% ann'l return)
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