By 2040, the world will need to add the equivalent of India and China’s current energy system to meet the demands of a surging global population and rising incomes. Among all other forms of energy, solar PV (photovoltaic system) is forecasted to see the largest and fastest growth in new capacity additions as prices continue to plummet and world governments enact policy favoring renewables.
The claims above, which come from the International Energy Agency’s (IEA) just-released World Energy Outlook 2017, is constructive for SolarEdge Technologies. The company was up more than 202% in 2017 as of November 13, jumping nearly 20 percent in a single day last week after record revenues and profitability were announced for the third quarter. The S&P 500 Energy Index, by comparison, has delivered negative returns for the year.
SolarEdge contracted last November on fears that the incoming Donald Trump administration would curtail incentives for “green” energy capacity additions.
SolarEdge just closed out a stellar third quarter. During the earnings call last week, founder and CEO Guy Sella reported record revenue of $166.6 million, up 30% from the same quarter last year; record cash flow generation of $33.6 million; and net income of $28 million, with diluted earnings per share at $0.61. This beat consensus estimates by 11 cents. Gross margins stood at 35% for the quarter. Oh, and the company has carried absolutely no debt for at least the past year.
There isn’t much about SolarEdge, in other words, that I can find fault with.
Some investors might believe that after such a phenomenal run, SolarEdge is due for a correction. Obviously I can’t predict the future, but for whatever it’s worth, the company’s own guidance for the fourth quarter has revenues reaching between $175 million and $185 million—which, if achieved, would set another fresh record.
So who are SolarEdge’s customers? According to Sella, the U.S. accounted for a little less than half of the Israeli company’s quarterly sales, with market share in Europe climbing. Australia, India and Japan are also “beginning to bear fruit.”
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12 December 2017