SolarEdge Technologies, Inc. reports 74.7% CAPEX growth in 2020 and 2.4% Revenue growth
02/16/2021 • About SolarEdge Technologies, Inc. (
$SEDG) • By InTwits
SolarEdge Technologies, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- SolarEdge Technologies, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $127m in 2020, $73m in 2019, $39m in 2018, $21m in 2017, $21m in 2016
- The company has business model with average profitability: ROIC is 11.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
SolarEdge Technologies, Inc.'s Revenue increased on 2.4%. Revenue growth showed slowdown in 20Q4 - it was -14.4% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.0 pp from 11.0% to 15.0% in 2020. During 2016-2020 EBITDA Margin topped in 2018 at 16.2% and was declining since that time.
Gross Margin decreased on 2.0 pp from 33.6% to 31.6% in 2020. During 2016-2020 Gross Margin topped in 2017 at 35.4% and was declining since that time. SG&A as a % of Revenue increased slightly on 1.3 pp from 9.6% to 10.9% in 2020.
Net Income margin decreased slightly on 0.66 pp from 10.3% to 9.6% in 2020. During 2016-2020 Net Income margin topped in 2017 at 13.9% and was declining since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 8.7% in 2020. The company showed CAPEX/Revenue growth of 5.2 pp from 3.5% in 2017 to 8.7% in 2020. It's average CAPEX/Revenue for the last three years was 6.0%. SolarEdge Technologies, Inc. invested a large share of EBITDA (67.8%) to CAPEX. During 2016-2020 CAPEX as a % of Revenue bottomed in 2017 at 3.5% and was growing since that time.
Return on investment
The company operates at good ROE (14.8%) while ROIC is low (11.0%). ROIC dropped on 15.6 pp from 26.5% to 11.0% in 2020. ROE decreased on 6.5 pp from 21.3% to 14.8% in 2020. ROE declined at -2.9 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.9x and Debt / EBITDA is 3.5x. Debt jumped on 1,040% while cash surged on 269%.
SolarEdge Technologies, Inc. has no short term refinancing risk: cash is higher than short term debt (2,796.9%).
Valuation and dividends
SolarEdge Technologies, Inc.'s trades at EV/EBITDA 79.7x and P/E 107.4x.
Management team
The company's CEO is Zvi Lando. Zvi Lando has 1 year tenure with the company. Ronen Faier is a SolarEdge Technologies, Inc.'s CFO. Ronen Faier has spent 10 years at the company.
Financial and operational results
FY ended 12/31/2020
SolarEdge Technologies, Inc. ($SEDG) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 490 | 607 | 937 | 1,426 | 1,459 | 2.4% |
| Gross Profit | 161 | 215 | 319 | 479 | 461 | -3.8% |
| SG&A | 52 | 69 | 98 | 137 | 159 | 15.8% |
| EBITDA | 76 | 98 | 152 | 227 | 187 | -17.4% |
| EBIT | 71 | 91 | 139 | | | |
| Tax | 6 | 16 | 9 | | | |
| Net Income | 63 | 84 | 129 | 147 | 140 | -4.2% |
| Stock Based Compensation | 12 | 18 | 31 | | | |
Balance Sheet
|
|---|
| Cash | 105 | 163 | 192 | 224 | 827 | 269.4% |
| Accounts Receivable | 71 | 110 | 174 | | | |
| Inventory | 67 | 83 | 142 | | | |
| Accounts Payable | 34 | 69 | 107 | | | |
| Short Term Debt | 0 | 0 | 17 | 25 | 30 | 16.0% |
| Long Term Debt | 0 | 0 | 4 | 33 | 635 | 1,836.0% |
Cash flow
|
|---|
| Capex | 21 | 21 | 39 | 73 | 127 | 74.7% |
Ratios
|
|---|
| Revenue growth | 50.7% | 23.9% | 54.4% | 52.1% | 2.4% | |
| EBITDA growth | 148.9% | 29.4% | 54.8% | 49.0% | -17.4% | |
|
|---|
| Gross Margin | 32.8% | 35.4% | 34.1% | 33.6% | 31.6% | -2.0% |
| EBITDA Margin | 15.5% | 16.2% | 16.2% | 15.9% | 12.8% | -3.1% |
| EBIT Margin | 14.5% | 15.0% | 14.9% | | |
| SG&A, % of revenue | 10.5% | 11.3% | 10.4% | 9.6% | 10.9% | 1.3% |
| SBC, % of revenue | 2.4% | 2.9% | 3.3% | | |
| Net Income Margin | 13.0% | 13.9% | 13.7% | 10.3% | 9.6% | -0.7% |
| CAPEX, % of revenue | 4.3% | 3.5% | 4.1% | 5.1% | 8.7% | 3.6% |
|
|---|
| ROIC | 31.2% | 26.5% | 28.6% | 26.5% | 11.0% | -15.6% |
| ROE | 27.8% | 24.5% | 26.8% | 21.3% | 14.8% | -6.5% |
| Net Debt/EBITDA | -1.4x | -1.7x | -1.1x | -0.7x | -0.9x | -0.1x |
People
|
|---|
| Insider ownership | 3.8% | 3.8% | 3.8% | | | |
| Employees | | 598 | 598 | | | |
| Revenue/Employee, th. $ | | 1,015 | 1,567 | | | |
SolarEdge Technologies, Inc. ($SEDG) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 431 | 332 | 338 | 358 | | 58.6% | 2.1% | -17.6% | -14.4% |
| EBITDA | 75 | 38 | 39 | 23 | | 107.9% | -31.0% | -48.9% | -61.9% |
| Net Income | 42 | 37 | 44 | 18 | | 122.2% | 10.7% | 5.1% | -66.5% |
Balance Sheet
|
|---|
| Cash | 324 | 428 | 1,048 | 827 | | 43.1% | 142.6% | 323.7% | 269.4% |
| Short Term Debt | 15 | 15 | 16 | 30 | | -42.2% | -42.6% | -40.7% | 16.0% |
| Long Term Debt | 30 | 30 | 600 | 635 | | -10.4% | -20.1% | 1,661.7% | 1,836.0% |
Ratios
|
|---|
| Gross Margin | 32.5% | 31.0% | 32.0% | 30.8% | | 0.8% | -3.0% | -2.0% | -3.4% |
| EBITDA Margin | 17.4% | 11.4% | 11.4% | 6.4% | | 4.1% | -5.5% | -7.0% | -8.0% |
| Net Income Margin | 9.8% | 11.0% | 12.9% | 4.9% | | 2.8% | 0.9% | 2.8% | -7.7% |
Peers in Semiconductor Equipment
Below you can find SolarEdge Technologies, Inc. benchmarking vs. other companies in Semiconductor Equipment industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | - | 44.0% | 8.7% | -31.0% | 218.5% |
| DAQO New Energy Corp. ($DQ) | - | 41.1% | -6.7% | 16.0% | 93.0% |
| Advanced Energy Industries, Inc. ($AEIS) | - | 38.7% | 7.1% | 9.7% | 79.5% |
| Ichor Holdings ($ICHR) | - | 61.7% | 25.6% | -24.6% | 47.3% |
| ACM Research, Inc. ($ACMR) | - | 33.4% | 104.5% | 44.1% | 45.7% |
| |
|---|
| Median (27 companies) | 5.0% | 24.7% | 14.0% | -2.8% | 16.9% |
|---|
| SolarEdge Technologies, Inc. ($SEDG) | - | 23.9% | 54.4% | 52.1% | 2.4% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 99.8% | 98.3% | 96.7% | 97.0% | 91.2% |
| PDF Solutions, Inc. ($PDFS) | 58.6% | 53.4% | 50.1% | 60.9% | 58.2% |
| Teradyne, Inc. ($TER) | 54.7% | 57.2% | 58.1% | 58.4% | 57.2% |
| Nova Measuring Instruments Ltd. ($NVMI) | 45.9% | 59.1% | 57.8% | 54.2% | 56.8% |
| Kulicke and Soffa Industries, Inc. ($KLIC) | 45.7% | 47.2% | 46.1% | 47.1% | 47.8% |
| |
|---|
| Median (27 companies) | 40.0% | 44.0% | 41.2% | 40.5% | 42.7% |
|---|
| SolarEdge Technologies, Inc. ($SEDG) | 32.8% | 35.4% | 34.1% | 33.6% | 31.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Xperi Corporation ($XPER) | 47.6% | 23.4% | 34.3% | 16.4% | 40.8% |
| DAQO New Energy Corp. ($DQ) | 43.3% | 49.1% | 36.1% | 27.1% | 38.0% |
| Teradyne, Inc. ($TER) | 3.4% | 29.6% | 27.9% | 30.3% | 33.8% |
| Cabot Microelectronics Corporation ($CCMP) | 23.4% | 27.2% | 31.5% | 20.1% | 31.6% |
| Entegris, Inc. ($ENTG) | 21.7% | 25.6% | 27.1% | 24.7% | 29.3% |
| |
|---|
| Median (25 companies) | 11.4% | 16.0% | 16.6% | 11.9% | 15.9% |
|---|
| SolarEdge Technologies, Inc. ($SEDG) | 15.5% | 16.2% | 16.2% | 15.9% | 12.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| DAQO New Energy Corp. ($DQ) | 29.5% | 19.8% | 47.4% | 79.7% | 17.5% |
| Photronics, Inc. ($PLAB) | 10.4% | 20.4% | 17.3% | 32.4% | 11.6% |
| Cabot Microelectronics Corporation ($CCMP) | 4.1% | 4.2% | 3.6% | 5.4% | 11.3% |
| Amkor Technology, Inc. ($AMKR) | 16.5% | 13.1% | 12.7% | 11.7% | 10.9% |
| ACM Research, Inc. ($ACMR) | 2.9% | 1.8% | 2.5% | 0.9% | 9.5% |
| |
|---|
| Median (24 companies) | 2.2% | 2.8% | 2.9% | 3.2% | 3.3% |
|---|
| SolarEdge Technologies, Inc. ($SEDG) | 4.3% | 3.5% | 4.1% | 5.1% | 8.7% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Teradyne, Inc. ($TER) | -2.9% | 23.8% | 22.6% | 29.2% | 40.3% |
| DAQO New Energy Corp. ($DQ) | 12.7% | 23.2% | 12.2% | 5.6% | 18.5% |
| Entegris, Inc. ($ENTG) | 10.3% | 14.7% | 15.4% | 11.3% | 16.4% |
| Advanced Energy Industries, Inc. ($AEIS) | 41.2% | 45.7% | 31.3% | 6.9% | 15.5% |
| Ultra Clean Holdings, Inc. ($UCTT) | 7.8% | 27.5% | 10.5% | 4.1% | 14.8% |
| |
|---|
| Median (27 companies) | 6.9% | 12.2% | 11.2% | 5.5% | 10.2% |
|---|
| SolarEdge Technologies, Inc. ($SEDG) | 31.2% | 26.5% | 28.6% | 26.5% | 11.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Veeco Instruments Inc. ($VECO) | - | - | - | 577.2x | 3.4x |
| Cohu, Inc. ($COHU) | -6.0x | -2.7x | - | 10.1x | 2.9x |
| Xperi Corporation ($XPER) | 4.2x | 5.0x | 2.6x | 6.1x | 2.1x |
| Cabot Microelectronics Corporation ($CCMP) | -1.3x | -1.8x | -1.9x | 3.6x | 2.0x |
| Entegris, Inc. ($ENTG) | 0.7x | 0.1x | 1.1x | 1.6x | 1.0x |
| |
|---|
| Median (23 companies) | -1.2x | -0.7x | -1.0x | -0.4x | -0.3x |
|---|
| SolarEdge Technologies, Inc. ($SEDG) | -1.4x | -1.7x | -1.1x | -0.7x | -0.9x |
