Hi Sona,
First of all, congratulations on your courage and on getting started with 110 units! Your post is exceptionally well-written from a rhetorical standpoint, and the story about the solid-state transformers (SST) in collaboration with Infineon is extremely fascinating.
But if we take off our rose-colored glasses for a moment and examine the hard, current data from the engine room, your thesis unfortunately clashes very painfully with reality. Here are three points where you’re on very thin ice, both mathematically and in terms of the balance sheet:
1. The Margin and Profitability Myth
You write that margins have recovered and free cash flow has turned positive. However, if you look at the raw TTM data (the last 12 months), the opposite is true: SolarEdge has not generated any profits at all in the last 12 months and continues to suffer from extremely low gross profit margins. The profitability rating stands at a disastrous 1 out of 5. An operational turnaround looks different on the books.
2. Financial health remains “Weak”
Your claim that this is no longer a “distressed story” is not supported by the market or the models. The quality check on Investing and other platforms currently and officially rates SolarEdge’s financial position as “Weak.” With a cash flow rating of just 2 out of 5 and moderate debt, the fundamentals remain extremely shaky.
3. You’re paying a massive premium for “hope”
At a current price of around 45.75 EUR, the stock is simply expensive.
The mathematical fair value (based on 12 recognized financial models) is just 34.92 EUR—so you’ve bought in with a downside risk of nearly -24%.
Even the analyst consensus (21 analysts) is significantly below your entry price at 38.96 EUR.
In addition, the system warns of a high P/B ratio.
Conclusion:
Your second tier (SST/AI data centers starting in 2028) is a fantastic story. But that’s exactly what it is right now: a story. Fundamentally, you’re buying an unprofitable company with weak cash flow at a price that’s far above the fair value based on its current earnings power.
As a speculative bet on a distant future, this might fly—but SolarEdge is, unfortunately, still a long way from being a fundamentally sound turnaround at this point.
I’m still rooting for you with those 110 shares, but I’ll be waiting on the sidelines for significantly lower prices that come closer to the fair value of ~35 EUR. 😉
Best regards!
First of all, congratulations on your courage and on getting started with 110 units! Your post is exceptionally well-written from a rhetorical standpoint, and the story about the solid-state transformers (SST) in collaboration with Infineon is extremely fascinating.
But if we take off our rose-colored glasses for a moment and examine the hard, current data from the engine room, your thesis unfortunately clashes very painfully with reality. Here are three points where you’re on very thin ice, both mathematically and in terms of the balance sheet:
1. The Margin and Profitability Myth
You write that margins have recovered and free cash flow has turned positive. However, if you look at the raw TTM data (the last 12 months), the opposite is true: SolarEdge has not generated any profits at all in the last 12 months and continues to suffer from extremely low gross profit margins. The profitability rating stands at a disastrous 1 out of 5. An operational turnaround looks different on the books.
2. Financial health remains “Weak”
Your claim that this is no longer a “distressed story” is not supported by the market or the models. The quality check on Investing and other platforms currently and officially rates SolarEdge’s financial position as “Weak.” With a cash flow rating of just 2 out of 5 and moderate debt, the fundamentals remain extremely shaky.
3. You’re paying a massive premium for “hope”
At a current price of around 45.75 EUR, the stock is simply expensive.
The mathematical fair value (based on 12 recognized financial models) is just 34.92 EUR—so you’ve bought in with a downside risk of nearly -24%.
Even the analyst consensus (21 analysts) is significantly below your entry price at 38.96 EUR.
In addition, the system warns of a high P/B ratio.
Conclusion:
Your second tier (SST/AI data centers starting in 2028) is a fantastic story. But that’s exactly what it is right now: a story. Fundamentally, you’re buying an unprofitable company with weak cash flow at a price that’s far above the fair value based on its current earnings power.
As a speculative bet on a distant future, this might fly—but SolarEdge is, unfortunately, still a long way from being a fundamentally sound turnaround at this point.
I’m still rooting for you with those 110 shares, but I’ll be waiting on the sidelines for significantly lower prices that come closer to the fair value of ~35 EUR. 😉
Best regards!
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@Raketentoni Good morning, Toni! Thanks for your detailed comments. The financial situation has improved significantly nonetheless, and it’s still a turnaround candidate—not a company that’s already profitable. I’m aware that this isn’t a safe investment. That’s why I’ve only taken a small position—currently about 3% of my portfolio! Let’s see how it goes. 😋
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•@Sona Good morning. Like I said, I'm keeping my fingers crossed for you. It would still be just a little too early for me.
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