Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Common Stock Valuation Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2015
- Return on Assets (ROA) since 2015
- Price to Earnings (P/E) since 2015
- Price to Operating Profit (P/OP) since 2015
- Price to Sales (P/S) since 2015
- Analysis of Debt
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Profitability Ratios (Summary)
SolarEdge Technologies Inc., profitability ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Gross Profit Margin
- The gross profit margin shows a declining trend over the five-year period. Starting at 34.06% in 2018, it remains relatively stable through 2019 and 2021 but gradually decreases each year, ending at 27.16% in 2022. This trend indicates a reduction in the company's ability to generate profit from its core production activities relative to sales revenue.
- Operating Profit Margin
- Operating profit margin also exhibits a downward trajectory, decreasing from 14.88% in 2018 to 5.34% in 2022. The drop is evident every year, with a marked reduction between 2021 and 2022. This suggests increased operating expenses or reduced operational efficiency impacting the company's profitability before interest and taxes.
- Net Profit Margin
- The net profit margin decreases steadily from 13.75% in 2018 to a low of 3.02% in 2022. The consistent decline across the years reflects diminishing overall profitability after accounting for all expenses and taxes, signaling potential challenges in cost management or external factors reducing net earnings.
- Return on Equity (ROE)
- ROE declines significantly over the period, starting at a robust 22.91% in 2018 and dropping to 4.31% in 2022. The sharp reduction indicates a diminished capacity to generate returns for shareholders, which may be due to lower net incomes or increased equity base without proportional profit growth.
- Return on Assets (ROA)
- The return on assets shows a declining pattern from 13.36% in 2018 to 2.2% in 2022. This reduction implies decreased efficiency in utilizing assets to generate earnings, suggesting either asset base growth outpacing profit or reduced operating performance affecting asset productivity.
Return on Sales
Return on Investment
Gross Profit Margin
SolarEdge Technologies Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Gross profit | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit exhibited a consistent upward trend from 2018 to 2022. Starting at $319,236 thousand in 2018, it increased steadily each year, reaching $844,648 thousand by 2022. This reflects a substantial growth in the company's profit after accounting for the cost of goods sold.
- Revenues
- Revenues showed a strong growth trajectory over the five-year period. The figures rose from $937,237 thousand in 2018 to $3,110,279 thousand in 2022, more than tripling during this time frame. This substantial increase indicates successful expansion or increased sales activities.
- Gross Profit Margin
- Despite the increase in gross profit and revenues, the gross profit margin displayed a downward trend. Starting at 34.06% in 2018, it slightly decreased to 33.62% in 2019 and further declined to 27.16% by 2022. This trend suggests that, although the company is generating more revenue, the proportion of revenue remaining after direct costs is shrinking, which may be attributable to rising costs or pricing pressures.
Operating Profit Margin
SolarEdge Technologies Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Operating Profit Margin, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenues
- Revenues exhibited a consistent upward trend over the analyzed periods, increasing from approximately $937 million at the end of 2018 to about $3.11 billion by the end of 2022. This growth indicates a strong expansion in sales or service delivery, with the most significant increase occurring between 2021 and 2022.
- Operating Income
- Operating income showed fluctuations during the same period. It grew from $139 million in 2018 to a peak of $207 million in 2021 but then declined to $166 million in 2022. Despite revenue growth, the operating income did not maintain a proportionate increase, suggesting rising costs or other factors impacting profitability.
- Operating Profit Margin
- The operating profit margin experienced a steady decline from 14.88% in 2018 to 5.34% in 2022. Despite the rising revenues, this decrease indicates that operating income did not keep pace with revenue growth, implying either increased operating expenses, lower pricing power, or changes in product mix affecting profitability efficiency.
- Overall Analysis
- While revenue growth has been robust and consistent, the company's profitability as measured by operating income and margin has been more volatile and deteriorating in profitability ratios. The diminishing operating profit margin particularly highlights pressure on operational efficiency or increased cost structures over time. This divergence suggests the company may need to focus more on cost control or operational improvements to sustain profitability amid growing sales.
Net Profit Margin
SolarEdge Technologies Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to SolarEdge Technologies, Inc. | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Net Profit Margin, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net profit margin = 100 × Net income attributable to SolarEdge Technologies, Inc. ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenues
- There is a consistent upward trend in revenues over the analyzed periods. Revenues increased significantly from approximately 937 million USD in 2018 to over 3.1 billion USD in 2022, indicating substantial growth in the company's sales or service income.
- Net Income Attributable
- Net income shows some volatility over the years. It increased from about 129 million USD in 2018 to a peak of roughly 169 million USD in 2021, then declined sharply to approximately 94 million USD in 2022. This decrease in net income for 2022 contrasts with the increasing revenue trend during the same period.
- Net Profit Margin
- The net profit margin declined steadily across the timeframe. Starting at 13.75% in 2018, it gradually decreased to just over 3% in 2022. Despite rising revenues, the company experienced a reduction in profitability relative to sales, particularly notable with the dramatic margin contraction in the last year evaluated.
- Overall Analysis
- The company exhibits strong revenue growth over the years; however, this growth is accompanied by a diminishing net profit margin and a decrease in net income in the most recent year. This indicates potential challenges in cost management, pricing pressure, or increased expenses that impacted overall profitability despite increasing sales volumes.
Return on Equity (ROE)
SolarEdge Technologies Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to SolarEdge Technologies, Inc. | ||||||
| Total SolarEdge Technologies, Inc. stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| ROE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| ROE, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROE = 100 × Net income attributable to SolarEdge Technologies, Inc. ÷ Total SolarEdge Technologies, Inc. stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Trend
- The net income attributable to SolarEdge Technologies, Inc. showed an overall upward trend from 2018 to 2021, increasing from $128.8 million in 2018 to a peak of $169.2 million in 2021. However, there was a significant decline in 2022, with net income dropping to $93.8 million. This decline represents a notable reduction compared to the previous peak year.
- Stockholders' Equity Development
- Total stockholders’ equity exhibited consistent growth throughout the observed period. Starting from $562.4 million in 2018, equity nearly doubled by 2019 and continued to increase steadily each year, reaching $2.18 billion in 2022. The growth in equity outpaced the growth in net income, particularly in the latter years.
- Return on Equity (ROE) Analysis
- The return on equity demonstrated a declining trend over the five-year span. ROE decreased from a high of 22.91% in 2018 to 18.06% in 2019, and then more sharply to around 13% in 2020 and 2021. By 2022, ROE had dropped further to 4.31%, reflecting a substantial reduction in profitability relative to equity.
- Overall Insights
- While the company’s equity base expanded significantly year over year, the return generated on this equity diminished considerably, especially in the most recent year. The substantial drop in net income in 2022 contributed to the markedly lower ROE, suggesting reduced efficiency in generating profits from shareholders' investments despite the increased equity capital. This divergence between rising equity and declining profitability may warrant strategic examination.
Return on Assets (ROA)
SolarEdge Technologies Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income attributable to SolarEdge Technologies, Inc. | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| ROA, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| ROA, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROA = 100 × Net income attributable to SolarEdge Technologies, Inc. ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to SolarEdge Technologies, Inc.
- The net income showed an overall increasing trend from 2018 to 2021, rising from approximately 128.8 million USD in 2018 to a peak of 169.2 million USD in 2021. However, in 2022, there was a significant decline in net income, dropping to around 93.8 million USD, indicating a reduction of roughly 44.5% compared to the previous year.
- Total Assets
- Total assets demonstrated consistent and substantial growth each year over the period analyzed. Starting at approximately 964.5 million USD in 2018, assets increased steadily, reaching over 4.26 billion USD by the end of 2022. This represents a more than fourfold increase over five years, highlighting aggressive asset expansion or acquisition.
- Return on Assets (ROA)
- ROA exhibited a clear downward trend throughout the five-year span. In 2018, ROA was relatively high at 13.36%, indicating efficient asset utilization. However, this metric declined steadily each year, falling to 2.2% by 2022. The reduction in ROA accompanied the increase in total assets, suggesting that the asset growth may not have translated proportionally into income generation efficiencies during this period.