SolarCity (NASDAQ: SCTY) and Solaredge Technologies (NASDAQ:SEDG) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, institutional ownership, valuation and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
SolarCity -112.36% 22.92% -10.69%
Solaredge Technologies 14.06% 22.07% 14.90%

Earnings and Valuation

This table compares SolarCity and Solaredge Technologies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SolarCity N/A N/A N/A ($0.31) -65.61
Solaredge Technologies $489.84 million 3.35 $76.61 million $1.65 23.12

Solaredge Technologies has higher revenue and earnings than SolarCity. SolarCity 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 & Insider Ownership

40.0% of SolarCity shares are owned by institutional investors. Comparatively, 67.9% of Solaredge Technologies shares are owned by institutional investors. 36.4% of SolarCity shares are owned by company insiders. Comparatively, 16.4% of Solaredge Technologies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for SolarCity and Solaredge Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SolarCity 0 0 0 0 N/A
Solaredge Technologies 2 2 10 0 2.57

Solaredge Technologies has a consensus target price of $34.73, indicating a potential downside of 8.97%. Given Solaredge Technologies’ higher probable upside, analysts plainly believe Solaredge Technologies is more favorable than SolarCity.

Summary

Solaredge Technologies beats SolarCity on 7 of the 9 factors compared between the two stocks.

About SolarCity

SolarCity Corporation is a United States-based solar provider. The Company is primarily engaged in the design, manufacture, installation and sale or lease of solar energy systems to residential and commercial customers, or sale of electricity generated by solar energy systems to customers. It operates through solar energy products and services segment. It integrates the sales, engineering, manufacturing, installation, monitoring, maintenance and financing of its distributed solar energy systems. It offers its customers the option to either purchase and own solar energy systems or to purchase the energy that its solar energy systems produce through various contractual arrangements. It installs solar energy system at its customer’s premises and charge the customer a monthly fee for the power that its system produces. Its products, services and technologies include solar energy systems, customer agreements, grid control/energy storage systems, Zep Solar mounting systems and software.

About Solaredge Technologies

SolarEdge Technologies, Inc. offers an inverter solution for a solar photovoltaic (PV) system. The Company’s products include SolarEdge Power Optimizer, SolarEdge Inverter, StorEdge Solutions and SolarEdge Monitoring Software. Its product roadmap consists of categories, including power optimizers, inverters, monitoring services, energy storage and smart energy management. The Company’s power optimizers provide module-level maximum power point (MPP) tracking and real-time adjustments of current and voltage to the optimal working point of each individual PV module. The Company’s solution consists of a direct current (DC) power optimizer, an inverter and a cloud-based monitoring platform that operates as a single integrated system.

Receive News & Ratings for SolarCity Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for SolarCity and related companies with MarketBeat.com's FREE daily email newsletter.