Value
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 8.7 |
| Fwd P/E | 3.6 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 31.8x
- ▸PEG: 0.25
SEDG · Why this verdict
Why SolarEdge Technologies (SEDG) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
SolarEdge Technologies has delivered 42% revenue growth and beaten earnings in 3 of 4 recent quarters while reducing its per-share losses, but business quality is below the minimum threshold at 2.1 out of 10 with all margin scores near zero, and a 20% short interest with a put/call ratio of 2.03 reflects deep market skepticism about the recovery path.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue grew 42% year over year, placing SolarEdge among the leading growth companies in the solar sector and suggesting that demand for residential and commercial solar inverter systems is recovering from the 2024 inventory correction. Growth breakdown | Revenue growth remains above 20% year over year in the next annual reporting period. | →Stable |
| CounterSolar industry revenue growth is highly sensitive to policy changes, interest rate levels affecting installer economics, and residential housing activity; the 42% growth rate may reflect a post-trough inventory normalization that will normalize to much lower rates. | ||
Every margin dimension — gross, operating, and net — scores near zero, and return on equity and return on assets are both at zero, reflecting that the company is currently generating no economic return at any level of the income statement. Quality breakdown | Quality score improves above 4.0 and gross margin turns positive on a trailing-twelve-month basis within 12 months. | →Stable |
| CounterThe company has significantly reduced its losses over the last 3 quarters; the current quality score near zero may represent the trough, and the improving EPS trajectory suggests gross margins may turn positive within 2-3 quarters. | ||
The company beat earnings estimates in 3 of the last 4 quarters with improving loss reduction — actual EPS of -$0.08 beat the -$0.27 estimate by 71.2% in May 2026 — suggesting the loss-reduction program is progressing faster than analysts expected. Earnings | EPS surprise remains positive in at least 3 of the next 4 quarters and per-share losses narrow to less than -$0.10 per quarter within 12 months. | →Stable |
| CounterBeating a deeply negative earnings estimate is a low bar; the company is still generating significant per-share losses in each quarter, and the path to profitability remains uncertain given the structural margin pressures from below-minimum quality scores. | ||
Short interest stands at 20% of float with a put/call ratio of 2.03 and implied volatility at 108%, indicating that a significant portion of the institutional market is positioned for further declines even as the operating results show gradual improvement. Key risks | Short interest falls below 12% and the put/call ratio drops below 1.5 within 12 months as the bear case becomes less compelling with continued loss reduction. | →Stable |
| CounterThe combination of 20% short interest with rising on-balance volume accumulation suggests a potential short squeeze setup; if the loss-reduction trajectory continues, short sellers may be forced to cover at significantly higher prices. | ||
Revenue grew 42% year over year, placing SolarEdge among the leading growth companies in the solar sector and suggesting that demand for residential and commercial solar inverter systems is recovering from the 2024 inventory correction.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 20% year over year in the next annual reporting period.
CounterSolar industry revenue growth is highly sensitive to policy changes, interest rate levels affecting installer economics, and residential housing activity; the 42% growth rate may reflect a post-trough inventory normalization that will normalize to much lower rates.
Every margin dimension — gross, operating, and net — scores near zero, and return on equity and return on assets are both at zero, reflecting that the company is currently generating no economic return at any level of the income statement.
→StableQuality breakdown
- Expectation
- Quality score improves above 4.0 and gross margin turns positive on a trailing-twelve-month basis within 12 months.
CounterThe company has significantly reduced its losses over the last 3 quarters; the current quality score near zero may represent the trough, and the improving EPS trajectory suggests gross margins may turn positive within 2-3 quarters.
The company beat earnings estimates in 3 of the last 4 quarters with improving loss reduction — actual EPS of -$0.08 beat the -$0.27 estimate by 71.2% in May 2026 — suggesting the loss-reduction program is progressing faster than analysts expected.
→StableEarnings
- Expectation
- EPS surprise remains positive in at least 3 of the next 4 quarters and per-share losses narrow to less than -$0.10 per quarter within 12 months.
CounterBeating a deeply negative earnings estimate is a low bar; the company is still generating significant per-share losses in each quarter, and the path to profitability remains uncertain given the structural margin pressures from below-minimum quality scores.
Short interest stands at 20% of float with a put/call ratio of 2.03 and implied volatility at 108%, indicating that a significant portion of the institutional market is positioned for further declines even as the operating results show gradual improvement.
→StableKey risks
- Expectation
- Short interest falls below 12% and the put/call ratio drops below 1.5 within 12 months as the bear case becomes less compelling with continued loss reduction.
CounterThe combination of 20% short interest with rising on-balance volume accumulation suggests a potential short squeeze setup; if the loss-reduction trajectory continues, short sellers may be forced to cover at significantly higher prices.
Per-dimension breakdown
Quality
2.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.0 |
| Current ratio | 7.1 |
| Moat | 4.2 |
| Piotroski F | 5.6 |
- ▸No competitive moat
- ▸Quality concerns
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 42% YoY
Momentum
2.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 8.3 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Oversold in uptrend (RSI 25)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 3.0 |
| erm sentiment | 4.9 |
- ▸Below analyst target
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $99,467 (0.003% of mkt cap)
Peer rank
2.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.4 |
| quality rank | 0.0 |
| growth rank | 6.7 |
Technical
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.2 |
| support resistance | 9.2 |
| 52w position | 2.5 |
| gap | 5.0 |
Risk (lower is worse)
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.5 |
| days to cover | 8.7 |
| volatility | 0.0 |
| put call | 6.9 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 5.3 |
| debt equity | 5.1 |
- ▸High short interest justified: 20%
- ▸High IV: 101%
- ▸Above max pain $29
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 3.9 |
- ▸Strong earnings: 3B/1M
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.7<4.5
- ASYMMETRY:-1.5=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-1.52
Upside
-22.9%
Downside
15.0%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.42>1.3, MCap $3.0B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:2.7<4.5.
The strongest dimensions are Growth at 10.0, Value at 6.8, and Technical at 6.2; the weakest are Quality at 2.1, Momentum at 2.7, and Peer rank at 2.8. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -1.52 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Revenue grew 42% year over year, placing SolarEdge among the leading growth companies in the solar sector and suggesting that demand for residential and commercial solar inverter systems is recovering from the 2024 inventory correction.
Trip ifRevenue growth falls below 10% year over year, declining more than 32 percentage points from the current 42% rate.
- P2The company beat earnings estimates in 3 of the last 4 quarters with improving loss reduction — actual EPS of -$0.08 beat the -$0.27 estimate by 71.2% in May 2026 — suggesting the loss-reduction program is progressing faster than analysts expected.
Trip ifEPS surprise falls below -30% in at least 2 of the next 4 quarters, indicating the loss-reduction program has stalled.
- P3Every margin dimension — gross, operating, and net — scores near zero, and return on equity and return on assets are both at zero, reflecting that the company is currently generating no economic return at any level of the income statement.
Trip ifGross margin remains below 0% for more than 4 consecutive quarters, indicating no structural improvement in the cost structure.
- P4Short interest stands at 20% of float with a put/call ratio of 2.03 and implied volatility at 108%, indicating that a significant portion of the institutional market is positioned for further declines even as the operating results show gradual improvement.
Trip ifShort interest rises above 25% of float or put/call ratio rises above 3.0, indicating bears are adding to rather than reducing positions.