SolarEdge Technologies Inc (SEDG)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | -97.31% | 23.65% | 27.16% | 32.04% | 31.62% |
| Operating profit margin | -189.50% | 1.35% | 5.34% | 10.55% | 9.77% |
| Pretax margin | -128.50% | 2.71% | 5.70% | 9.53% | 11.22% |
| Net profit margin | -139.17% | 9.74% | 3.02% | 8.61% | 9.62% |
SolarEdge Technologies Inc's gross profit margin has shown a slight increase from 31.62% in December 31, 2020 to 32.04% in December 31, 2021, but experienced a significant decline to 27.16% in December 31, 2022, and further dropped to 23.65% in December 31, 2023. However, in December 31, 2024, the gross profit margin appears to be negative at -97.31%, which raises concerns about the company's ability to generate profits from its core operations.
In terms of operating profit margin, SolarEdge Technologies Inc's performance indicates a positive trend initially, with an increase from 9.77% in December 31, 2020 to 10.55% in December 31, 2021. However, the margin then declined significantly to 5.34% in December 31, 2022, and further dropped to 1.35% in December 31, 2023. The operating profit margin turned negative in December 31, 2024 with a value of -189.50%, reflecting operational challenges that may be impacting the company's profitability.
Similarly, the pretax margin for SolarEdge Technologies Inc exhibited a positive trend from 11.22% in December 31, 2020 to 9.53% in December 31, 2021. However, the margin decreased to 5.70% in December 31, 2022, and further dropped to 2.71% in December 31, 2023. Notably, the pretax margin became highly negative in December 31, 2024 with a value of -128.50%, indicating significant financial challenges impacting the company's earnings before taxes.
Analyzing the net profit margin, there is a fluctuation in SolarEdge Technologies Inc's profitability over the years. The net profit margin decreased from 9.62% in December 31, 2020 to 8.61% in December 31, 2021, and then sharply declined to 3.02% in December 31, 2022. Surprisingly, there was a positive turnaround in December 31, 2023 with a net profit margin of 9.74%. However, in December 31, 2024, the net profit margin turned sharply negative at -139.17%, indicating a significant loss in the company's bottom line.
Overall, the declining trend in profitability margins, especially in the recent period, raises concerns about SolarEdge Technologies Inc's ability to maintain sustainable profitability and efficiently manage its operations. Further analysis of the company's financial health and operational efficiency is recommended to address the challenges reflected in these profitability ratios.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -64.95% | 0.88% | 3.89% | 7.14% | 5.85% |
| Return on assets (ROA) | -47.70% | 6.32% | 2.20% | 5.83% | 5.76% |
| Return on total capital | -117.09% | 2.70% | 5.93% | 7.58% | 7.57% |
| Return on equity (ROE) | -190.56% | 12.02% | 4.31% | 12.91% | 12.92% |
SolarEdge Technologies Inc's profitability ratios reflect some fluctuations over the years.
- Operating return on assets (Operating ROA) has shown a mixed trend, with a slight increase from 5.85% in 2020 to 7.14% in 2021, but a notable decrease to 3.89% in 2022, and further dropping to 0.88% in 2023, and a significant negative value of -64.95% in 2024.
- Return on assets (ROA) started at 5.76% in 2020, had a marginal increase in 2021 to 5.83%, then dropped to 2.20% in 2022, rose again to 6.32% in 2023, but plunged to a significant negative value of -47.70% in 2024.
- Return on total capital was relatively stable around 7-8% in 2020 and 2021, but decreased to 5.93% in 2022, then more significantly to 2.70% in 2023, and a substantial negative value of -117.09% in 2024.
- Return on equity (ROE) also exhibited fluctuations, starting at 12.92% in 2020 and 12.91% in 2021, then declining to 4.31% in 2022, rising to 12.02% in 2023, and dropping sharply to a significant negative value of -190.56% in 2024.
Overall, the profitability ratios indicate a mix of positive and negative trends, with significant decreases in profitability metrics in the last year (2024). It is essential for SolarEdge Technologies Inc to address the challenges impacting their profitability and implement strategies to improve their financial performance.