Analyzing Solaredge Technologies (NASDAQ:SEDG) and Mellanox Technologies (NASDAQ:MLNX)

Solaredge Technologies (NASDAQ:SEDG) and Mellanox Technologies (NASDAQ:MLNX) are both mid-cap oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their risk, valuation, dividends, analyst recommendations, earnings, profitability and institutional ownership.

Valuation & Earnings

This table compares Solaredge Technologies and Mellanox Technologies’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Solaredge Technologies $937.24 million 4.22 $128.83 million $2.69 30.89
Mellanox Technologies $1.09 billion 5.66 $134.26 million $3.85 29.22

Mellanox Technologies has higher revenue and earnings than Solaredge Technologies. Mellanox Technologies is trading at a lower price-to-earnings ratio than Solaredge Technologies, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

80.4% of Solaredge Technologies shares are owned by institutional investors. Comparatively, 76.0% of Mellanox Technologies shares are owned by institutional investors. 7.9% of Solaredge Technologies shares are owned by company insiders. Comparatively, 4.2% of Mellanox Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility and Risk

Solaredge Technologies has a beta of 0.05, meaning that its share price is 95% less volatile than the S&P 500. Comparatively, Mellanox Technologies has a beta of 0.46, meaning that its share price is 54% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Solaredge Technologies and Mellanox Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Solaredge Technologies 1 3 9 0 2.62
Mellanox Technologies 0 7 2 0 2.22

Solaredge Technologies presently has a consensus target price of $74.54, suggesting a potential downside of 10.30%. Mellanox Technologies has a consensus target price of $116.83, suggesting a potential upside of 3.84%. Given Mellanox Technologies’ higher possible upside, analysts clearly believe Mellanox Technologies is more favorable than Solaredge Technologies.

Profitability

This table compares Solaredge Technologies and Mellanox Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Solaredge Technologies 10.09% 17.81% 10.51%
Mellanox Technologies 14.09% 16.86% 13.63%

Summary

Mellanox Technologies beats Solaredge Technologies on 8 of the 14 factors compared between the two stocks.

Solaredge Technologies Company Profile

SolarEdge Technologies, Inc., together with its subsidiaries, designs, develops, and sells direct current (DC) optimized inverter systems for solar photovoltaic (PV) installations worldwide. Its SolarEdge system consists of power optimizers, inverters, communication and smart energy management solutions, and a cloud based monitoring platform. The company's products are used in a range of solar market segments, such as residential, commercial, and small utility-scale solar installations. It also provides pre-sales support, ongoing trainings, and technical support and after installation services; and lithium-ion cells, batteries, and energy storage solutions for various industries, including energy storage systems, residential and commercial solar systems, uninterruptible power supplies, electric vehicles, aerospace, marine, and others. The company sells its products to the providers of solar PV systems; and solar installers and distributors, electrical equipment wholesalers, and PV module manufacturers, as well as engineering, procurement, and construction firms. SolarEdge Technologies, Inc. was founded in 2006 and is headquartered in Herzliya, Israel.

Mellanox Technologies Company Profile

Mellanox Technologies, Ltd., a fabless semiconductor company, designs, manufactures, markets, and sells interconnect products and solutions. Its products facilitate data transmission between servers, storage systems, communications infrastructure equipment, and other embedded systems. The company offers InfiniBand solutions, including switch and gateway integrated circuits (ICs), adapter cards, cables, modules, and software, as well as switch, gateway, and long-haul systems; and Ethernet solutions, such as Ethernet switch products and Ethernet adapters for use in enterprise data center, high-performance computing, embedded environments, hyperscale, Web 2.0, and cloud data centers. It also provides adapters to server, storage, communications infrastructure, and embedded systems original equipment manufacturers (OEMs) as ICs or standard card form factors with PCI express interfaces; and switch ICs and systems to server, storage, communications infrastructure, and embedded systems OEMs to create switching equipment. In addition, the company supports server operating systems, including Linux, Windows, AIX, HPUX, Solaris, and VxWorks. It sells its products through its direct sales force, a network of sales representatives, and independent distributors. The company operates in the United States, China, Europe, rest of Americas, and rest of Asia. Mellanox Technologies, Ltd. was founded in 1999 and is headquartered in Sunnyvale, California.

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