What happened
The days grew shorter throughout November, but shares of SolarEdge Technologies (SEDG -2.77%) remained a bright spot for investors throughout the month. While the S&P 500 shot 5.4% higher, SolarEdge's stock roared 29.9% higher, according to data from S&P Global Market Intelligence.
Besides the company's report of a record-breaking third quarter, investors warmed up to the solar stock in response to analysts who offered bullish takes throughout the month.
So what
While analysts expected the company to book revenue of $822.4 million for the third quarter 2022, SolarEdge exceeded the analysts' estimate and reported sales of $836.7 million. Representing a year-over-year increase of 59%, SolarEdge's Q3 2022 revenue set a new high-water mark for quarterly revenue. According to Zvi Lando, SolarEdge's CEO, the company's impressive top-line growth "reflects extremely strong momentum in Europe, where our revenues grew 90% compared to the same quarter last year."
In addition to its recent performance, investors celebrated the company's auspicious outlook for the remainder of the year. During the earnings presentation, management provided Q4 2022 revenue guidance: $855 million to $885 million. Should the company achieve the midpoint of this guidance, it will result in SolarEdge generating 2022 revenue of $3.09 billion, which would amount to a 57% increase over the $1.96 million it booked in 2021.
Shortly after SolarEdge reported earnings, analysts provided bullish takes on the stock, leading investors to continue picking up shares. On Nov. 8, for example, Kashy Harrison, an analyst at Piper Sandler, hiked the price target on SolarEdge's stock to $325 from $315. Shortly thereafter, Ameet Thakkar, an analyst at BMO Capital, also espoused a positive outlook on the stock, lifting the price target to $355 from $316. At the time, Thakkar's price target implied upside of about 18% to SolarEdge's stock.
Now what
The momentum that drove shares of SolarEdge higher in November continues to benefit the stock in December. Since the start of the month, shares have climbed nearly 6%, while the S&P 500 has dipped about 3%.
Those on the sidelines who may be considering adding some sunshine to their portfolios via shares of SolarEdge, however, may want to take a pause before picking up shares. Currently, the stock is valued at 41 times forward earnings, representing a premium to its five-year average forward earnings multiple of 34. Fortunately, there are plenty of other solar stocks to consider.
