Note from Daily Trade Alert: The following article first appeared in The Growth Stock Advisor, a premium newsletter offered by Investors Alley.
It seems like just yesterday when we first recommended SolarEdge Technologies (SEDG) to Growth Stock Advisor subscribers, but in fact it was almost five years ago.
At the time, President Trump’s energy policies had made solar stocks were unpopular on Wall Street. Solar was thought to be dead in the U.S., but for contrarian investors, that made it the perfect time to buy…which is why we recommended the stock despite the negative headlines.
But now, fast forward ahead to . SolarEdge stock has soared about sixfold from the recommended price as Wall Street finally began to understand the move toward renewable power is an unstoppable, longterm, global macroeconomic trend.
SolarEdge [was] up more than 200% [in 2020] alone as the incoming Biden Administration promises to be friendlier to all sorts of green energy projects.
SolarEdge a leading global producer of PV (photovoltaic) inverters. The company developed the DC (direct current) optimized inverter solution that changed the way power is harvested and managed in photovoltaic systems. SolarEdge’s intelligent inverter solution maximizes power generation while lowering the cost of energy produced by the PV system, for improved return on investment.
Since beginning commercial shipments in 2010, SolarEdge has shipped over 21.0 gigawatts’ (GW) worth of its DC optimized inverter systems. Its products have been installed in solar PV systems in 133 countries.
The reality is that traditional PV systems aren’t terribly efficient. There’s a lot of power loss, caused by various factors like weather. SolarEdge delivers a distributed system that tackles these challenges. Energy loss due to panel mismatch is prevented by performing maximum power point testing (MPPT) for each panel individually. String voltage is kept fixed at all times, so strings can be combined regardless of length, tilt, or type of panels used. Continuous performance measurement enables online monitoring and fault detection at the panel level. And to achieve all of this without raising the cost of a solar system, SolarEdge provides panel optimizers as well as its own inverter and monitoring web portal.
The company’s power optimizer is embedded into each panel—instead of the junction box—by the panel manufacturers. The power optimizer, which can also be retrofitted by PV installers onto regular modules, performs MPPT individually for each panel and maintains a fixed DC string voltage. Power optimizers also collect performance measurements for each panel, transmitting the data over existing power lines.
The SolarEdge Solar inverter is responsible for DC to AC inversion while power point testing and voltage management are handled separately for each module by power optimizers. Fixed string voltage ensures operation at the highest efficiency (up to 97%) at all times, regardless of the string length and temperature.
This is what differentiates the company’s technology. SolarEdge is well on its way to becoming the de facto solar inverter manufacturer with their DC voltage optimize strategy, versus the more expensive micro-inverter strategy used by its rivals.
The Outlook Is Sunny
Here are some highlights of its latest quarterly results:
- Revenue of $338.1 million, including record revenues from Europe
- GAAP gross margin of 32%
- Cashflow from operations of 28.4 million
On a recent earnings call, SolarEdge CEO Zivi Lando had this to say:
Our third-quarter results reflect significant growth in Europe, despite the current economic slowdown caused by the global pandemic. Our solar business outside the U.S. reached an all-time high, and the U.S. market is showing signs of return to pre-pandemic installation levels. In our non-solar business, our e-Mobility team is gearing up to deliver to our customer the first significant batch of full powertrain solutions for assembly in electric vehicles in the fourth quarter.
As SolarEdge continues to advance what it calls “smart energy,” the company addresses a broad range of energy market segments through its diversified product offerings. These include residential, commercial, and large-scale PV, energy storage, and backup solutions; EV charging; home energy management; grid services and virtual power plants; batteries and uninterrupted power supply (UPS) solutions.
The company also has a home electric car charger with a solar inverter that merges the worlds of electric vehicles and residential solar power.
In other words, the company is well-positioned in many aspects of the move toward greener energy. That keeps it a five-star stock.
January 4, 2021
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Source: The Growth Stock Advisor