SolarEdge Technologies, Inc. (SEDG) Intrinsic Value & DCF Valuation
Solar · NASDAQ
Current Price
$30.83
Intrinsic Value
$40.49
+23.9% margin of safety
What Is SolarEdge Technologies, Inc.'s Intrinsic Value?
As of 2026-08-21, the base-case DCF model estimates the intrinsic value of SolarEdge Technologies, Inc. (SEDG) at $40.49 per share, compared with a market price of $30.83, a margin of safety of +23.9%. The base case assumes 11.4% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $32.92 to $49.13. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is SolarEdge Technologies, Inc. (SEDG) Undervalued?
At $30.83, SEDG trades about 23.9% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Integrated System Design
SolarEdge's unique DC-optimized inverter system offers a competitive edge. This integrated approach simplifies installation and enhances system performance, creating a sticky ecosystem for installers and end-users.
↑Installer Network & Brand Loyalty
A strong network of trained installers and established brand recognition fosters customer loyalty. This deep relationship with installers translates into repeat business and a preference for SolarEdge products.
↑Technological Innovation & IP
Continuous investment in R&D and a portfolio of patents protect its proprietary inverter technology. This intellectual property creates a barrier to entry for competitors seeking to replicate its performance advantages.
INVESTMENT RISKS
↓Execution & Profitability Concerns
Downgrades to 'Hold' highlight rising execution risks and doubts about sustained profitability. This indicates potential operational inefficiencies or market challenges impacting financial performance.
↓Geopolitical & Trade Policy Impact
New import restrictions on polysilicon products could disrupt supply chains and increase costs. This exposes SolarEdge to risks associated with international trade policies and geopolitical tensions.
↓Valuation & Market Sentiment
The stock is considered overvalued despite recent price increases. This suggests that market sentiment may not fully align with the company's fundamental performance, posing a risk of price correction.
Base case
SEDG base case valuation
Intrinsic Value
$40.49
Margin of safety
+23.9%
Expected annual return
+5.6%
Base case assumptions: 11.4% annual growth, 10.0% discount rate, 20.83x exit multiple, 5 year projection. Data as of 2026-08-21.
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)
$21.66
FCF/Share (TTM)
$1.46
ROIC (TTM)
-9.3%
ROE (TTM)
-62.5%
P/FCF
20.8x
EV/EBITDA
-11.0x
FCF Yield
4.80%
Debt/Equity
0.96x
On a trailing twelve-month basis, SEDG generates free cash flow per share of $1.46 alongside a ROIC of -9.3%, both central inputs for a DCF valuation. Its P/FCF ratio of 20.8x and FCF yield of 4.80% then frame how SEDG is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of SEDG?
SolarEdge Technologies, Inc. currently generates $1.46 in free cash flow per share. At the current price of $30.83, 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 20.8x with a free cash flow yield of 4.80%. This P/FCF is in a moderate range. 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 ($1.46) 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 0.96x, 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 -9.3% means the company's return on invested capital sits below the level that typically clears 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 0.96x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of -11.0x, 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 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.