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

Risk and Volatility

SolarEdge Technologies has a beta of 0.1, suggesting that its stock price is 90% less volatile than the S&P 500. Comparatively, Sunrun has a beta of -0.68, suggesting that its stock price is 168% less volatile than the S&P 500.

Earnings & Valuation

This table compares SolarEdge Technologies and Sunrun’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
SolarEdge Technologies $489.84 million 3.38 $76.61 million $1.65 23.30
Sunrun $453.90 million 1.39 $91.68 million $0.87 6.80

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

Profitability

This table compares SolarEdge Technologies and Sunrun’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SolarEdge Technologies 14.06% 22.07% 14.90%
Sunrun 18.79% 9.25% 2.69%

Institutional and Insider Ownership

59.9% of SolarEdge Technologies shares are held by institutional investors. Comparatively, 75.1% of Sunrun shares are held by institutional investors. 16.4% of SolarEdge Technologies shares are held by company insiders. Comparatively, 24.1% of Sunrun shares are held 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.

Analyst Ratings

This is a summary of recent ratings and target prices for SolarEdge Technologies and Sunrun, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SolarEdge Technologies 2 1 11 0 2.64
Sunrun 0 0 4 0 3.00

SolarEdge Technologies currently has a consensus price target of $33.82, suggesting a potential downside of 12.05%. Sunrun has a consensus price target of $9.00, suggesting a potential upside of 52.03%. Given Sunrun’s stronger consensus rating and higher possible upside, analysts clearly believe Sunrun is more favorable than SolarEdge Technologies.

Summary

SolarEdge Technologies beats Sunrun on 8 of the 14 factors compared between the two stocks.

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.

About Sunrun

Sunrun Inc. is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems (Projects) in the United States. The Company is engaged in providing solar energy services and products to its customers. As of December 31, 2016, it operated a fleet of residential solar energy systems in the United States, with approximately 134,000 customers across 16 states, as well as the District of Columbia. The Company sells to homeowners over the phone, in the field through canvassing and in-home sales and through retail sales channels through its strategic partners. The solar service offerings are provided through its lease and power purchase agreements. It sells solar service offerings and installs solar energy systems for homeowners through its direct-to-consumer channel. It sells solar energy systems to homeowners, as well as related products, such as solar panels, inverters, racking systems and other solar-related equipment to resellers.

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