Head to Head Review: Mellanox Technologies (NASDAQ:MLNX) vs. Solaredge Technologies (NASDAQ:SEDG)

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

Valuation & Earnings

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

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

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.

Insider & Institutional Ownership

76.0% of Mellanox Technologies shares are held by institutional investors. Comparatively, 80.4% of Solaredge Technologies shares are held by institutional investors. 4.2% of Mellanox Technologies shares are held by company insiders. Comparatively, 7.9% of Solaredge Technologies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility and Risk

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Mellanox Technologies and Solaredge Technologies, as provided by MarketBeat.com.

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

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

Profitability

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

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

Summary

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

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.

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.

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