Neil,
Positives…
-
Growing revenues and earnings rapidly.
-
Appear to be taking market share from competitor Enphase.
-
COP21 commitments around the globe should help overall growth in this industry.
Concerns…
- For how long will gross margins be sustainable? Prices for solar equipment will probably keep falling. SEDG believe they can reduce their costs more than drop in prices. But I question for how long. Some of the recent gains in gross margins have been because of moving manufacturing to low cost countries, supply chain efficiencies, manufacturing efficiencies, and economies of scale. Perhaps going forward these cost lowering factors will decelerate the rate of cost reduction. How fast will prices for solar equipment components fall?
Conclusion:
Perhaps the near term (1 year?) for this company looks good. Longer term one might want to be cautious.
Chris