Contrasting First Solar (FSLR) and SolarEdge Technologies (SEDG)

First Solar (NASDAQ: FSLR) and SolarEdge Technologies (NASDAQ:SEDG) are both oils/energy companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Insider & Institutional Ownership

53.1% of First Solar shares are held by institutional investors. Comparatively, 57.4% of SolarEdge Technologies shares are held by institutional investors. 0.6% of First Solar shares are held by insiders. Comparatively, 16.4% of SolarEdge Technologies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares First Solar and SolarEdge Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Solar $2.57 billion 1.98 $296.64 million ($4.84) -10.07
SolarEdge Technologies $481.19 million 2.28 $66.74 million $1.42 18.36

First Solar has higher revenue and earnings than SolarEdge Technologies. First Solar is trading at a lower price-to-earnings ratio than SolarEdge Technologies, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for First Solar and SolarEdge Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Solar 1 13 9 0 2.35
SolarEdge Technologies 3 1 9 0 2.46

First Solar presently has a consensus price target of $46.29, indicating a potential downside of 5.07%. SolarEdge Technologies has a consensus price target of $23.33, indicating a potential downside of 10.52%. Given First Solar’s higher possible upside, equities research analysts clearly believe First Solar is more favorable than SolarEdge Technologies.

Profitability

This table compares First Solar and SolarEdge Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Solar -18.80% 6.43% 4.94%
SolarEdge Technologies 12.64% 21.01% 14.15%

Summary

SolarEdge Technologies beats First Solar on 8 of the 11 factors compared between the two stocks.

First Solar Company Profile

First Solar, Inc. is a provider of photovoltaic (PV) solar energy solutions. The Company designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. The Company also develops, designs, constructs and sells PV solar power systems that primarily use the modules it manufactures. It operates through two segments: components and systems. The components segment is engaged in the design, manufacture and sale of cadmium telluride (CdTe) solar modules, which convert sunlight into electricity. The systems segment includes the development, construction, operation and maintenance of PV solar power systems, which primarily use its solar modules. In addition, the Company provides operations and maintenance (O&M) services to system owners that use solar modules manufactured by it or by third-party manufacturers. The Company’s solar modules had an average rated power per module of approximately 114 watts, as of December 31, 2016.

SolarEdge Technologies Company Profile

SolarEdge Technologies, Inc. offers an inverter solution for a solar photovoltaic (PV) system. The Company’s products include SolarEdge Power Optimizer, SolarEdge Inverter, StorEdge Solutions and SolarEdge Monitoring Software. Its product roadmap consists of categories, including power optimizers, inverters, monitoring services, energy storage and smart energy management. The Company’s power optimizers provide module-level maximum power point (MPP) tracking and real-time adjustments of current and voltage to the optimal working point of each individual PV module. The Company’s solution consists of a direct current (DC) power optimizer, an inverter and a cloud-based monitoring platform that operates as a single integrated system.

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