Energy Business

Initial Analyst Coverage Takes SolarEdge to Post-IPO Highs

SolarEdge Technologies Inc. (NASDAQ: SEDG) has seen its quiet period after the initial public offering come to an end. This solar player has not seen its IPO price of $18 since the shares began trading, and the stock was just under $25 at the end of last week.

24/7 Wall St. has looked at the post-IPO trading of SolarEdge, and the initial analyst report summaries have been included as well. As previously noted, this was a hot IPO on its debut. Also, all the shares were sold by the company when it came public.

Goldman Sachs and Deutsche Bank Securities were the joint book-running managers for the offering. That should make their research reports, outside of being larger brokerage firms than most, more valuable or weighted higher in the number of shares sold. Their calls were as follows:

  • Goldman Sachs initiated coverage with a Buy rating and a $31 price target.
  • Deutsche Bank initiated coverage with a Buy rating and a $29 price target.

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SolarEdge’s co-managers in the underwriting syndicate were listed as Needham, Canaccord Genuity and Roth Capital Partners. The co-manager coverage was seen as follows:

  • Needham initiated coverage with a Buy rating and a $30 price target.
  • Roth Capital also started coverage with a Buy rating and $30 price target.
  • We have yet to hear back from Canaccord Genuity on how the firm covered SolarEdge.

Another firm jumped the gun last week ahead of the quiet period ending. Avondale Partners, which was not an underwriter (and not subject to the quiet period) initiated coverage with a Market Outperform rating and assigned a $28 price target.

SolarEdge was founded in 2006, and it began commercial shipments in 2010. Since shipments started, SolarEdge has shipped approximately 1.3 gigawatts of its DC optimized inverter systems. The company’s products have been installed in solar PV systems in 73 countries. At the end of February 2015, it had shipped approximately 5.1 million power optimizers and 222,000 inverters. Approximately 100,000 installations, many of which may include multiple inverters, are currently connected to and monitored by SolarEdge’s cloud-based monitoring platform.

The company’s revenue rose to $133.2 million in fiscal 2014 from $79.0 million in fiscal 2013. Revenue for the first six months of fiscal 2015 rose to $140.3 million, versus $58.1 million in the first six months of fiscal 2014. Also, its gross margin increased to 16.5% in fiscal 2014 from 5.6% in fiscal 2013.

Some of SolarEdge’s customers include solar leaders such as SolarCity Corp. (NASDAQ: SCTY), SunRun and Vivint Solar Inc. (NYSE: VSLR). The company also sells to key solar distributors and electrical equipment wholesalers, such as AliusEnergy, Krannich Solar Group, Segen and Soligent Distribution.

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SolarEdge initially reacted more positively to the analyst coverage, hitting a high of $25.78 after the opening bell on Monday. That also marks a post-IPO high. By 10:25 a.m. Eastern Time, SolarEdge shares were up fractionally at $24.84 on the day.

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