SolarEdge Technologies, Inc. (SEDG) Stock Valuation — DCF Analysis
Solar · NASDAQ
Current Price
$60.80
Intrinsic Value
$67.7
+10.2% margin of safety
COMPETITIVE MOAT
↑Integrated System Advantage
SolarEdge's unique integrated inverter and optimizer system offers a competitive edge. This synergy simplifies installation and enhances system performance, creating customer stickiness.
↑Strong Brand Recognition
The company has built a reputable brand in the solar industry. This recognition fosters trust among installers and end-users, leading to continued demand for their products.
↑Technological Innovation
Continuous investment in R&D allows SolarEdge to maintain a technological lead. Their advanced solutions, including energy storage and smart grid capabilities, differentiate them.
INVESTMENT RISKS
↓Intense Market Competition
The solar industry is highly competitive with numerous players. Price wars and rapid technological shifts from rivals pose a significant threat to market share.
↓Supply Chain Vulnerabilities
Reliance on global supply chains for components makes SolarEdge susceptible to disruptions. Geopolitical events or manufacturing issues can impact production and profitability.
↓Regulatory and Policy Changes
Government incentives and regulations heavily influence solar adoption. Changes in these policies, such as reduced subsidies, could negatively impact demand.
Base case
SEDG base case valuation
A base case discounted cash flow model for SEDG estimates an intrinsic value of about $67.7 per share, against a current price of $60.8. The model assumes 20.0% annual free cash flow growth, a 10.0% discount rate, and a 30x exit multiple.
Intrinsic Value
$67.7
Margin of safety
+10.2%
Expected annual return
+2.2%
Base case assumptions: 20.0% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SEDG valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for SolarEdge Technologies, Inc. respond.
Open DCF Calculator for SEDGCompany Overview
SolarEdge Technologies, Inc. (SEDG) is a company specializing in the design, development, and sale of direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations globally. The company operates through five key segments: Solar, Energy Storage, e-Mobility, Critical Power, and Automation Machines. Its product portfolio encompasses inverters, power optimizers, communication devices, and smart energy management solutions, catering to residential, commercial, and smaller utility-scale solar projects. SolarEdge also provides a cloud-based monitoring platform that collects and processes data from its optimizers and inverters to oversee and manage solar PV systems. Beyond its core solar offerings, SolarEdge delivers a range of solutions including residential, commercial, and large-scale PV, energy storage and backup, electric vehicle charging, and home energy management, along with grid services. The company also extends into e-Mobility, automation machinery, lithium-ion cells and battery packs, and uninterruptible power supply (UPS) solutions, as well as developing virtual power plants to aid in grid load management and stability. To support its customers, SolarEdge offers pre-sales assistance, ongoing training programs, and technical and post-installation services. Its products are sold to providers of solar PV systems, solar installers and distributors, electrical equipment wholesalers, PV module manufacturers, and engineering, procurement, and construction (EPC) firms. Founded in 2006, SolarEdge Technologies, Inc. is headquartered in Herzliya, Israel.
Financial Metrics — SEDG Stock Valuation Data
Revenue/Share (TTM)
$21.32
FCF/Share (TTM)
$1.30
ROIC (TTM)
-16.7%
ROE (TTM)
-79.6%
P/FCF
47.5x
EV/EBITDA
-16.9x
FCF Yield
2.10%
Debt/Equity
0.95x
Based on trailing twelve-month data, SEDG shows a free cash flow per share of $1.30 and a ROIC of -16.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 47.5x and FCF yield of 2.10% are important context metrics when evaluating SEDG's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of SEDG?
SolarEdge Technologies, Inc. currently generates $1.30 in free cash flow per share. At the current price of $60.80, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is SEDG undervalued?
SEDG trades at a P/FCF ratio of 47.5x with a free cash flow yield of 2.10%. This elevated P/FCF suggests the market is pricing in significant future growth. However, whether SEDG is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value SEDG stock using DCF?
To perform a DCF valuation on SolarEdge Technologies, Inc.: (1) Start with the trailing free cash flow per share ($1.30) as the base, (2) project future FCF growth over 5-10 years based on Solar industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting SEDG's risk profile — with a debt-to-equity of 0.95x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to SEDG?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For SolarEdge Technologies, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Solar trends, then discounting those amounts to today's dollars. SEDG's ROIC of -16.7% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect SEDG stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For SEDG, with a debt-to-equity ratio of 0.95x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of -16.9x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See SEDG PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Energy valuationsDCF and P/E value SEDG with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.