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Actionable news in SEDG: SolarEdge Technologies Inc,

SolarEdge: Strong Product Cycles Will Overcome Residential Solar Industry Headwinds

SolarEdge posted a strong quarter mainly at the expense of Enphase. We believe the Optimizer product line has legs and will continue to deliver over the next several quarters.

The Company is set to become even stronger due to the new HD Wave technology based product line which should propel the Company to new heights.

In spite of the reservations about ITC and California Net Metering, given the low multiple, we see the stock as a strong buy.

SolarEdge Technologies (NASDAQ:SEDG) announced its fiscal first quarter results after the markets closed on Wednesday.

Revenue of $115.1M and non-GAAP EPS of $0.36 (GAAP $0.32) beat the Street expectations of $0.30 by a wide margin. Revenue guidance for the next quarter, at $118M-$121M, is also above consensus estimates of $115M.

The revenue and profitability growth was predictable on the strength of the Company's product portfolio and lack of competitive solutions from its nearest competitor Enphase Energy (NASDAQ:ENPH).

Going forward, there will be an additional product area where the Company is likely to see a very strong product cycle. In September, the Company unveiled its HD Wave technology, which is expected to have dramatic advantages over current inverter vendor products in terms of size, weight, reliability, efficiency, and cost. Management commentary during the earnings call suggests that the new product line is on schedule and the Company will ship a low-double digit percent of its product mix in the current quarter from this technology.

The combined power of the above two product cycles mean that the Company has several favorable tailwinds working for it in CY 2016. These include:

- Continued architectural and cost structure superiority vis-à-vis Enphase Energy means that there is no imminent...