SolarEdge Technologies, Inc. (NASDAQ:SEDG) Growing Rapidly, But Expectations Still High

SolarEdge Technologies, Inc. (NASDAQ:SEDG) has been experiencing accelerated earnings and sales growth over the past five years.  Over that time frame the firm has seen earnings growth of 38.30% and sales growth of 50.30%.

One way to completely avoid market mistakes is to not invest at all. Of course, that could end up to be the greatest mistake of all. Investors will occasionally make some mistakes, as that comes with the territory. The key as with most things in life is to figure out how to learn from past mistakes and use that knowledge to make better decisions going forward. Pinpointing exactly what went wrong may help shed some light on what needs improvement. Sometimes, investors will suffer losses and become discouraged right out of the gate. The tendency is to then try to recoup losses by taking even bigger risks which can lead to complete disaster. One of the biggest differences between successful investors and failed investors is the willingness and ability to learn from past personal mistakes.

While the firm has enjoyed the upward movement, it’s important to look at analyst expectations and where the company is headed from here.  On a consensus basis, analysts are projecting EPS growth of -1.48% for next year and have a $50.63 one year price target on the stock.   The stock recently traded at $41.50.

 Six Fundamental Characteristics of Great Growth Stocks

#6 Huge Mass Markets – The more potential customers there are, the greater the possibility that both the company, and the investment in said company, will be a success. 

#5 Market Dominance/Barriers to Entry – Look for companies who hold patents.  This is great barrier to entry, ensuring no competition.  Look for companies who dominate the market, blowing away the competition, though market dominance can be harder to measure. 

#4 Accelerating Earnings Growth – If a company’s earnings growth rate increases for two consecutive quarters, their growth is accelerating.  Faster growth is better growth, and a company whose earnings growth rate is accelerating is an attractive investment.

#3 Triple-Digit Revenue Growth – Companies growing their revenues at triple-digit rates (100% or better) are usually smaller and less known, making them attractive for buying by institutions. 

#2 High Profit Margins – In recent decades, high-margin stocks have beaten low-margin stocks by a huge amount. 

#1 Top Notch, Innovative Management – All great managers who led their companies to success usually did so by thinking differently.  There is no surefire and quick measurement of management talent.  When you find a top manager, one with a record of prior success and accolades, you should strike.  Top managers usually find a way to overcome obstacles. 

Let’s take a look at how the stock has been performing recently.  Over the past twelve months, SolarEdge Technologies, Inc. (NASDAQ:SEDG)‘s stock was 18.23%.  Over the last week of the month, it was -3.13%, 8.53% over the last quarter, and  -9.09% for the past six months. 

SolarEdge Technologies, Inc. (NASDAQ:SEDG)’s EPS is 3.22.  Last year, their EPS growth was 291.30% while their EPS growth over the past five years is 38.30%.  Analysts are predicting SolarEdge Technologies, Inc.’s stock to grow -1.48% over the next year and 20.00% over the next five.

With the stock market trading at current levels, investors may be tossing around ideas about how to trade the next few quarters. As we slip further into the second half of the year, investors may be assessing the latest earnings reports and trying to calculate the future prospects of certain stocks. Finding bargain stocks at current levels may be much harder than spotting hidden gems when markets are down. Plowing through the fundamentals may help sort out some of the questions that investors may have that come along with trading at these levels. Investors may have to do a little more homework in order to identify that next great trade, but the rewards may be well worth the extra time and effort.

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