Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
SolarEdge Technologies Inc., FCFE calculation
US$ in thousands
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).
The financial trajectory between 2018 and 2022 is characterized by a transition from steady cash generation to a significant liquidity contraction. A critical divergence is observed between operational cash flows and free cash flow to equity (FCFE), particularly in the latter half of the period, indicating an increasing reliance on non-operational financing or an escalation in capital expenditures and debt obligations.
- Net Cash Provided by Operating Activities
- Operational cash generation exhibited moderate growth and stability from 2018 to 2021, peaking at 259 million USD in 2019 and maintaining a baseline above 214 million USD through 2021. However, a severe decline occurred in 2022, where cash provided by operating activities dropped to 31.28 million USD, representing an approximately 85% decrease from the previous year.
- Free Cash Flow to Equity (FCFE) Volatility
- FCFE demonstrated extreme volatility compared to operational cash flows. After a steady increase from 146.68 million USD in 2018 to 177.17 million USD in 2019, a substantial spike to 715.08 million USD was recorded in 2020. This anomaly suggests a significant inflow of equity-based financing or a drastic reduction in capital expenditures during that period. This peak was followed by a precipitous decline to 48.80 million USD in 2021 and a shift into negative territory in 2022, reaching -138.19 million USD.
- Correlation and Liquidity Analysis
- The relationship between operating cash and FCFE shifted from a positive correlation to a state of instability. In 2020, FCFE far exceeded operating cash flow, indicating that cash available to shareholders was driven by activities other than core operations. By 2022, the negative FCFE, coupled with the collapse in operating cash flow, signals a period of significant cash outflow that exceeds the company's internal capacity to generate liquidity from its primary business activities.
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Price to FCFE Ratio, Current
SolarEdge Technologies Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 47,255,226 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | (138,195) |
| FCFE per share | -2.92 |
| Current share price (P) | 295.71 |
| Valuation Ratio | |
| P/FCFE | — |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Advanced Micro Devices Inc. | 94.18 |
| Analog Devices Inc. | 32.84 |
| Applied Materials Inc. | 42.30 |
| Broadcom Inc. | 57.74 |
| Intel Corp. | — |
| KLA Corp. | 44.91 |
| Lam Research Corp. | 55.94 |
| Marvell Technology Inc. | 64.09 |
| Micron Technology Inc. | 15.18 |
| NVIDIA Corp. | 45.27 |
| Qualcomm Inc. | 12.75 |
| Texas Instruments Inc. | 83.28 |
| P/FCFE, Sector | |
| Semiconductors & Semiconductor Equipment | 134.78 |
| P/FCFE, Industry | |
| Information Technology | 70.14 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
SolarEdge Technologies Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 56,146,608 | 52,818,655 | 51,581,559 | 49,235,498 | 47,255,226 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | (138,195) | 48,805) | 715,083) | 177,173) | 146,685) | |
| FCFE per share3 | -2.46 | 0.92 | 13.86 | 3.60 | 3.10 | |
| Share price1, 4 | 295.71 | 246.07 | 321.99 | 125.95 | 42.26 | |
| Valuation Ratio | ||||||
| P/FCFE5 | — | 266.31 | 23.23 | 35.00 | 13.61 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Advanced Micro Devices Inc. | 33.46 | 44.72 | — | — | — | |
| Analog Devices Inc. | 24.14 | 34.67 | 33.98 | — | — | |
| Applied Materials Inc. | 19.17 | 27.20 | 23.21 | — | — | |
| Broadcom Inc. | 14.62 | 22.35 | 9.16 | — | — | |
| Intel Corp. | — | 14.25 | — | — | — | |
| KLA Corp. | 9.01 | 28.06 | — | — | — | |
| Lam Research Corp. | 24.95 | 34.58 | — | — | — | |
| Marvell Technology Inc. | 13.90 | 72.25 | — | — | — | |
| Micron Technology Inc. | 18.66 | 37.24 | — | — | — | |
| NVIDIA Corp. | 54.83 | 35.22 | — | — | — | |
| Qualcomm Inc. | 19.13 | 17.93 | 34.91 | — | — | |
| Texas Instruments Inc. | 23.88 | 21.87 | — | — | — | |
| P/FCFE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | 28.10 | 25.18 | — | — | — | |
| P/FCFE, Industry | ||||||
| Information Technology | 26.68 | 27.39 | — | — | — | |
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 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= -138,195,000 ÷ 56,146,608 = -2.46
4 Closing price as at the filing date of SolarEdge Technologies Inc. Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 295.71 ÷ -2.46 = —
6 Click competitor name to see calculations.
Between 2018 and 2022, a significant divergence is observed between the market valuation and the company's ability to generate free cash flow to equity (FCFE). While the share price exhibited a general upward trajectory for much of the period, FCFE per share experienced extreme volatility, culminating in negative values by the end of the period.
- Share Price Evolution
- The share price demonstrated substantial growth from 42.26 US$ in 2018 to a peak of 321.99 US$ in 2020. Following this peak, the price experienced a correction to 246.07 US$ in 2021 before recovering to 295.71 US$ by the end of 2022.
- FCFE per Share Performance
- FCFE per share increased from 3.10 US$ in 2018 to a peak of 13.86 US$ in 2020. This positive trend reversed sharply in 2021, with values falling to 0.92 US$. By 2022, FCFE per share turned negative at -2.46 US$, signaling a transition from cash generation to net cash consumption.
- P/FCFE Ratio and Valuation Divergence
- The P/FCFE ratio expanded from 13.61 in 2018 to 35.00 in 2019, before contracting to 23.23 in 2020 as cash flow growth outpaced price growth. In 2021, the ratio surged to 266.31, reflecting a severe misalignment between the market price and the underlying cash flow generation. For the period ending December 31, 2022, the ratio is not applicable due to the negative FCFE per share, indicating that the company was no longer generating surplus cash flow for equity holders.
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