SolarEdge Technologies (SEDG): Assessing Valuation After Strong Launch of Commercial Storage Systems in Germany

SolarEdge Technologies (SEDG) just kicked off its first commercial battery installations in Germany, racking up more than 150 orders for its new CSS-OD commercial storage system within weeks of launch. This strong demand highlights a wave of interest from PV installers and commercial users who are seeking combined solar and storage setups in Germany’s active self-consumption market.

See our latest analysis for SolarEdge Technologies.

After a challenging stretch, SolarEdge Technologies has seen its share price rally more than 123% so far this year, even as momentum cooled in the past month. A breakout year-to-date price gain stands out against a backdrop of multi-year pain, with the one-year total shareholder return at a remarkable 208%. The stock still sits miles below all-time highs because of steep three- and five-year total return declines. With excitement building around its expansion in Germany and ongoing innovation in storage solutions, investors appear to be reassessing the company’s long-term growth potential and risk profile.

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But with this sharp recovery in the share price and analyst targets sitting just above current levels, the question is whether SolarEdge Technologies is still undervalued or if the recent enthusiasm is already pricing in much of its future growth.

Most Popular Narrative: 9.5% Overvalued

With SolarEdge Technologies trading at $33.09, the most widely followed narrative sets its fair value at $30.23. This means the current price is nearly 10% above what the narrative considers justified. This perspective provides vital context for those tracking momentum and questioning the reliability of the recent surge.

The rally in SolarEdge's stock appears to be pricing in robust future revenue growth driven by U.S. policy support (extension of manufacturing and storage credits). However, risks are rising as the elimination of the 25D residential solar tax credit is expected to cause a substantial drop in U.S. residential demand in 2026. This drop is only partially offset by third-party owned (TPO) shifts, potentially constraining topline growth.

Read the complete narrative.

What is really fueling that premium price? The narrative’s calculation hinges on an unusually aggressive set of financial forecasts and a discounted cash flow model that assumes a smooth return to profitability. Want to know whether analyst optimism or sector uncertainty holds more weight in this valuation story? Dive deeper for the full narrative breakdown.

Result: Fair Value of $30.23 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a surprising extension of U.S. manufacturing tax credits or a stronger than expected uptick in battery storage adoption could quickly alter this outlook.

Find out about the key risks to this SolarEdge Technologies narrative.

Another View: This Time, the SWS DCF Model Says Undervalued

Taking a step back from narratives and multiples, the SWS DCF model suggests SolarEdge Technologies is actually undervalued. According to our DCF assessment, the shares are trading 12.9% below their estimated fair value of $38. This difference challenges the overvalued view from other approaches. Is there more room for upside, or are risks being overlooked?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own SolarEdge Technologies Narrative

If you see things differently or would rather dig into the details yourself, you can easily shape your own SolarEdge Technologies story in just a few minutes, Do it your way

A great starting point for your SolarEdge Technologies research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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