Analysts 'Incrementally Bullish' on SolarEdge Shares After Analyst Day
Investing.com
Published Mar 31, 2022 09:35AM ET
Updated Mar 31, 2022 10:07AM ET
Analysts 'Incrementally Bullish' on SolarEdge (SEDG) Shares After Analyst Day
Wall Street analysts are positive on SolarEdge Technologies (NASDAQ:SEDG) following an analyst day that took place yesterday.
The company updated the financial model that is now based on the strong company revenue growth prospects.
BofA analyst Julien Dumoulin-Smith raised the price target to $424.00 per share, up from the prior $411.00. The analyst believes investors are now likely to focus on operating margins going forward.
"We emphasize SEDG's model (and our largely unchanged estimates) suggesting +60% top line growth in 2022 from 34% in 2021 with legs into 2023 as storage will be yet to hit a run rate fully burdened for Sella 2 capacity until then. But with growth beyond the legacy high margin resi segment (suggested at 40% GM) gross margins on a consolidated basis will fall, framing a clear bifurcation from SEDG's legacy peer Enphase. We acknowledge that some investors may struggle with this comp in particular but point to ~20% EBITDA margins in the outer years as sustainable alongside elevated growth aspirations (vs 13% in Q4)," Dumoulin-Smith said in a client note.
Similarly, Goldman Sachs analyst Brian Lee raised the price target to $439.00 per share (from $431.00) on the Buy-rated SEDG shares (on Conviction List) as strong growth is driven by robust solar demand and entry into new markets.
"Following SEDG's 2022 analyst day, we come away incrementally bullish on near-to-medium term demand trends and see growth momentum likely to persist long-term as SEDG expands its portfolio to large-scale solar applications as well as battery storage, in addition to others. To that end, SEDG provided updates to its long term financial targets, with annual revenue growth targets above expectations and with more specificity on product level gross margin targets. We believe the company's disclosure of >5.5GW of commercial shipments and backlog for 2022 is a particularly positive sign of robust growth this year, while lower gross margin owing to mix would appear to be offset by increased operating leverage with the net result being higher EPS power vs. our prior views despite more muted unit margins," Lee said.
SEDG stock is up 1% today.
By Senad Karaahmetovic
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Written By: Investing.com
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