SEDG - SolarEdge: Maybe In 2025 When The Channel Normalizes

2024-05-14 14:24:04 ET

Summary

• SolarEdge is a global solar inverter, battery, and software provider with roughly half of their business coming from Europe.
• The cyclical downturn in solar has impacted SolarEdge greatly, leading to an 84% decline in share price and net losses for three quarters in a row.
• High inventory levels both on the balance sheet and in the channel have resulted in under-shipping final demand.

Investment Thesis

SolarEdge ( SEDG ) has had a rough year. The stock price has fallen 84% from its 52-week high ($313.55 to $49.47). Like the rest of the solar industry, SolarEdge has been struggling with higher interest rates leading to lower solar demand and a saturated channel leading to product over supply. What sets SolarEdge apart has been their lack of awareness around contracting demand, leading to a substantial inventory pileup....

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