Is SolarEdge Technologies, Inc. overvalued or undervalued?

As of 8 May 2024, the valuation grade for SolarEdge Technologies, Inc. has moved from very expensive to risky, indicating a significant shift in its perceived value. The company is currently considered overvalued. Key ratios reveal a Price to Book Value of 1.81, an EV to EBIT of -0.76, and an EV to Sales of 1.07, all of which suggest underlying financial challenges.
In comparison to peers, SolarEdge's valuation appears unfavorable; for instance, Lumentum Holdings, Inc. has a P/E ratio of -15.94 and an EV to EBITDA of -593.05, while Encore Wire Corp. boasts a more attractive P/E of 14.48 and an EV to EBITDA of 9.60. The stark contrast in performance metrics highlights SolarEdge's struggles, particularly with a staggering ROCE of -250.92% and a ROE of -241.40%. Additionally, the company's stock has underperformed significantly against the S&P 500, with a one-year return of -51.35% compared to the index's 10.26%.