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SolarEdge Technologies Inc SEDG

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Cutting Our FVEs for Residential Solar Companies Following California Regulatory Proposal

Brett Castelli Equity Analyst

Analyst Note

| Brett Castelli |

We are lowering our fair value estimates for residential solar companies after incorporating a proposed regulatory ruling in California that could slow rooftop solar growth. We cut our fair value estimates for Sunrun and SunPower by approximately 15% given their relatively large exposure to California. We cut Enphase’s fair value by 5% given its relative concentration within the U.S. residential market. We are reaffirming our fair value estimates for other solar component suppliers such as SolarEdge and Generac given lower revenue exposure.

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Company Profile

Business Description

SolarEdge Technologies designs, develops, and sells direct current optimized inverter systems for solar photovoltaic installations. The company system consists of power optimizers, inverters, and cloud-based monitoring platform and addresses a broad range of solar market segments, from residential solar installations to commercial and small utility-scale solar installations. The company sells its products directly to solar installers, engineering, procurement, and construction firms and indirectly to solar installers through distributors and electrical equipment wholesalers. Additionally, the company has nonsolar products targeting the energy storage, e-mobility, and ultracritical power solutions industries.

1 HaMada Street, Post Box 12001
Herziliya Pituach, 4673335, Israel
T +972 99576620
Sector Technology
Industry Solar
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Aggressive Growth
Employees 3,174