The stock of SolarEdge Technologies Inc., the Israeli maker of solar power systems, could rise 40 percent in the next year since it is one of the few profitable companies in the sector and is positioned to grow, Barron's reported in its March 27 edition.
The business and investing publication cited its strong balance sheet and expectations of growth in international sales as well as an opportunity in the commercial market as reasons for a stock rise.
The stock closed at $13.70, off 0.7 percent on Friday and is down 43 percent in the past year.
“SolarEdge makes a category-killer product for a secular growth industry,” says Robert Marcin, a Philadelphia investor who was formerly a portfolio manager at Miller Anderson & Sherrerd. He thinks the company could earn close to $1.50 a share on a non-GAAP basis this year and that the stock could double in the next few years.
SolarEdge captured about 35% of the U.S. residential solar market in just a few years with its integrated optimizer/inverter system, which offered advantages over rival technologies.
“Relative to the rest of the solar industry, SolarEdge is better positioned because of its strong gross margins, balance sheet, and cash flow,” says Mark Strouse, a JPMorgan equity analyst who carries an Overweight rating and a $20 price target on the stock. “The expectation about competitive pressure in the second half of 2017 and 2018 already seems to be priced in.”
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