We came across a bullish thesis on SolarEdge Technologies, Inc. on The Few Bets That Matter’s Substack. In this article, we will summarize the bulls’ thesis on SEDG. SolarEdge Technologies, Inc.’s share was trading at $43.07 as of February 24th. SEDG’s forward P/E was 57.47 according to Yahoo Finance.
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SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, manufactures, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations in the United States, Germany, the Netherlands, Italy, rest of Europe, and internationally. SolarEdge Technologies presents a compelling investment opportunity as the company has stabilized after a prolonged period of weakness, with its stock having bottomed around 0.7x sales during the inventory and demand crisis.
Today, with inventories clean and demand stable, a repeat of that extreme undervaluation appears unlikely in the near to medium term. Historical context shows that the company previously bottomed near ~2x sales before the solar boom, with valuations peaking around 35x sales during rapid revenue growth.
Given current fundamentals, a 1.5x–2x sales multiple represents a healthy risk/reward, particularly as management executes its ongoing transformation. Normal operations, underpinned by stable guidance and consistent quarterly demand, provide a baseline expectation, but a successful transformation could push valuations well above 4x sales, reflecting higher margins, market share gains, and improved operational execution.
From a technical perspective, SolarEdge’s price action supports this positive outlook. After a nearly 97% decline over three years, the stock formed a clear bottom in late 2024, accompanied by increasing volume and accumulation, followed by multiple breakouts and a reclaiming of the weekly 50-day moving average in August 2025.
Despite a somewhat muted recent quarter, the market rewarded the stock with a 15% gain, signaling optimism about the company’s turnaround potential rather than short-term results. Current levels around $35 offer an attractive entry point, with limited downside as long as the stock remains above the weekly 50-day and the local bottom near $28.
With stable demand, ongoing transformation, and upside from accelerating revenues and cash generation, SolarEdge offers a highly favorable risk/reward, positioning investors to benefit from both operational execution and broader sector recovery.
Previously, we covered a bullish thesis on Enphase Energy, Inc. (ENPH) by OppCost in May 2025, which highlighted the company’s shift from a microinverter supplier to an integrated home energy solutions provider, its exposure to electrification trends, and attractive forward valuation despite industry headwinds. ENPH’s stock price has been flat since our coverage. OppCost shares an identical view but emphasizes management’s restructuring measures and operational alignment as key catalysts for long-term growth.
SolarEdge Technologies, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held SEDG at the end of the third quarter which was 27 in the previous quarter. While we acknowledge the risk and potential of SEDG as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SEDG and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
