SEDG - SolarEdge: Lost Its Edge Over The Competition
2024-05-15 12:59:18 ET
Summary
- SolarEdge has experienced a significant decline in value, losing 81% over the past year and facing competitive challenges in the residential solar market.
- The company is losing its competitive advantage against rivals Enphase and Tesla, who have superior access to capital.
- SolarEdge's liquidity profile is alarming, with limited cash and ST investments and immense inventory buildup.
- The solar industry should slow for years as high rates make solar less attractive to buyers.
- In my opinion, SolarEdge may need to pursue dilutive equity sales soon based on the rate of its cash-flow declines.
SolarEdge ( SEDG ) was a darling of green energy investors. It was among the most popular solar stocks and rose by over 400% from the mid-2010s to its 2021 peak. However, it collapsed over the past year, losing 81% of its value and retracting back toward its IPO price. That has come amid a significant decline in its sales and a massive cut to its gross margins, pushing its operating margins into deeply negative territory. See below: