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Earnings Previews: Ammo, Occidental, SolarEdge, Shopify

SolarEdge

SolarEdge Technologies Inc. (NASDAQ: SEDG) makes and sells a variety of products for solar photovoltaic installations, including optimized inverters that convert the direct current of solar modules into alternating current that can be sent to the grid.

The company’s stock price jumped 236% last year, while competitor Enphase saw a jump of nearly double that. Shares took a bit of a hit in January when Tesla got into the inverter market and sliced 16% from SolarEdge’s share price. The dip was only temporary, though, and the stock has recovered nearly all of it.

For the fourth quarter, SolarEdge is forecast to report earnings per share (EPS) of $0.86 on sales of about $356 million. Compared to the fourth quarter of 2019, EPS would be down about 48% and revenue down almost 15%. For the full year, analysts are looking for EPS of $4.00, down 11% from 2019, on sales of $1.46 billion, up about 2%.

At a recent trading price of around $328, the stock is trading well above its consensus price target of $284.88. The current price represents a multiple of nearly 83 to expected 2020 earnings and 70 times expected 2021 earnings.

Shopify

Shopify Inc. (NYSE: SHOP), a provider of a cloud-based e-commerce platform for small and medium-sized businesses, has seen its shares soar by more than 5,500% since its May 2015 IPO. That $17 per share price has climbed to just over $1,451 in less than six years. The stock added nearly 185% last year alone.

One question investors might ask is, “How long can this go on?” When you consider that e-commerce remains a huge opportunity, even after 25 years of Amazon, Shopify’s run may turn out to be a marathon as well as a sprint.

When the company reports fourth-quarter results before the opening bell on Wednesday, analysts are expecting Shopify to report EPS of $1.24 on sales of $910 million. That’s a jump of nearly 300% in EPS and 80% in revenues. For the full year, EPS is forecast at $3.68, about 12-times higher than the $0.30 reported for 2019.

The stock has raced past its consensus price target of $1,140.62 and is within a hair’s breadth of the high target of $1,453. Shopify stock currently trades at nearly 400 times forecast 2020 earnings and 392 times expected 2021 EPS.

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