SolarEdge Technologies (NASDAQ: SEDG) and SunPower Corporation (NASDAQ:SPWR) are both small-cap oils/energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for SolarEdge Technologies and SunPower Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SolarEdge Technologies 3 1 9 0 2.46
SunPower Corporation 1 10 3 0 2.14

SolarEdge Technologies presently has a consensus price target of $23.33, suggesting a potential downside of 14.06%. SunPower Corporation has a consensus price target of $9.32, suggesting a potential upside of 0.26%. Given SunPower Corporation’s higher probable upside, analysts clearly believe SunPower Corporation is more favorable than SolarEdge Technologies.

Insider & Institutional Ownership

57.3% of SolarEdge Technologies shares are owned by institutional investors. Comparatively, 25.6% of SunPower Corporation shares are owned by institutional investors. 16.4% of SolarEdge Technologies shares are owned by company insiders. Comparatively, 0.9% of SunPower Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares SolarEdge Technologies and SunPower Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SolarEdge Technologies 12.64% 21.01% 14.15%
SunPower Corporation -21.84% -12.56% -2.88%

Valuation & Earnings

This table compares SolarEdge Technologies and SunPower Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SolarEdge Technologies $481.19 million 2.37 $66.74 million $1.42 19.12
SunPower Corporation $2.49 billion 0.52 -$24.89 million ($3.92) -2.37

SolarEdge Technologies has higher revenue, but lower earnings than SunPower Corporation. SunPower Corporation is trading at a lower price-to-earnings ratio than SolarEdge Technologies, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

SolarEdge Technologies has a beta of 0.04, suggesting that its stock price is 96% less volatile than the S&P 500. Comparatively, SunPower Corporation has a beta of 3.11, suggesting that its stock price is 211% more volatile than the S&P 500.

Summary

SolarEdge Technologies beats SunPower Corporation on 10 of the 13 factors compared between the two stocks.

SolarEdge Technologies Company Profile

SolarEdge Technologies, Inc. offers an inverter solution for a solar photovoltaic (PV) system. The Company’s products include SolarEdge Power Optimizer, SolarEdge Inverter, StorEdge Solutions and SolarEdge Monitoring Software. Its product roadmap consists of categories, including power optimizers, inverters, monitoring services, energy storage and smart energy management. The Company’s power optimizers provide module-level maximum power point (MPP) tracking and real-time adjustments of current and voltage to the optimal working point of each individual PV module. The Company’s solution consists of a direct current (DC) power optimizer, an inverter and a cloud-based monitoring platform that operates as a single integrated system.

SunPower Corporation Company Profile

SunPower Corporation is a global energy company. The Company delivers complete solar solutions to residential, commercial, and power plant customers. The Company’s segments include Residential Segment, Commercial Segment and Power Plant Segment. The Residential and Commercial Segments combined are referred to as Distributed Generation. The Company offers solar module technology and solar power systems that are designed to generate electricity over a system life over 25 years; Integrated Smart Energy software solutions that enable customers to manage and optimize the cooperation center of excellence (CCOE) measurement; Installation, construction, and ongoing maintenance and monitoring services; and financing solutions that provide customers a range of options for purchasing or leasing solar products at competitive energy rates. The Company offers a set of residential solutions that deliver value to homeowners and its dealer partners.

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