SolarEdge Technologies, Inc.’s (NASDAQ:SEDG) most recent earnings update in December 2018 confirmed that the company gained from a large tailwind, leading to a high double-digit earnings growth of 53%. Below, I’ve laid out key growth figures on how market analysts view SolarEdge Technologies’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
Analysts’ outlook for the upcoming year seems pessimistic, with earnings falling by a double-digit -10%. However, the following year seems to show a complete contrast, with earnings expected to grow at a double digit 12% relative to the most recent earnings level in 2019, reaching US$145m, before falling. in 2022.
While it is useful to be aware of the rate of growth each year relative to today’s value, it may be more insightful analyzing the rate at which the business is rising or falling every year, on average. The pro of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of SolarEdge Technologies’s earnings trajectory over time, be more volatile. To calculate this rate, I’ve appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is -7.7%. This means, we can assume SolarEdge Technologies will chip away at a rate of -7.7% every year for the next few years.
For SolarEdge Technologies, I’ve compiled three important factors you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is SEDG worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SEDG is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of SEDG? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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