Following yesterday’s analyst conference, Wall Street analysts have positive opinions about SolarEdge Technologies NASDAQ:

A company update was made to the financial model. It is now based in part on strong prospects for revenue growth.

Julien Dumoulin Smith from BofA raised the target price by $424.00 to $424.00 per shares, an increase of the previous $411.00. Analyst Julien Dumoulin-Smith believes that investors now will be more focused on operating margins.

We emphasize SEDG’s model and our mostly unchanged estimates. This suggests +60% top-line growth in 2022, from 34% in 2020. There will also be legs in 2023. Storage won’t reach a full run rate for Sella 2 capacity before then. However, with the growth of legacy high margin resi segments (suggested as 40% GM), gross margins will drop on a consolidated level. This is a stark bifurcation to SEDG’s peer Enphase. While we understand that investors might struggle to deal with this comp, we point out that 20% EBITDA margins are sustainable in the outer years alongside higher growth aspirations (13% in Q4),” Dumoulin Smith stated in a client letter.

Brian Lee from Goldman Sachs increased the price target on Buy-rated SEDG shares (on the Conviction List) to $439.00, up from $431.00. Strong growth is due to strong solar demand and entry in new markets.

We are incrementally optimistic about near-to medium term demand trends. This growth momentum is likely to continue long-term, as SEDG broadens its portfolio of large-scale solar and battery storage applications. SEDG updated its financial targets for the long-term, including higher annual revenue growth than expected and more detailed information on gross margin targets at product levels. We believe the company’s disclosure of >5.5GW of commercial shipments and backlog for 2022 is a particularly positive sign of robust growth this year, while lower gross margin owing to mix would appear to be offset by increased operating leverage with the net result being higher EPS power vs. our prior views despite more muted unit margins,” Lee said.

Today, SEDG stock has risen 1%

By Senad Karaahmetovic