SMA Solar Technology S92.DE
What does SMA Solar Technology do?
SMA Solar Technology develops, manufactures and sells inverters for photovoltaic systems as well as battery inverters. In addition, there are monitoring systems for solar plants, energy management solutions, charging solutions for electric vehicles, and digital services for the planning, operation and maintenance of energy systems. The company, based in Germany, has an international presence and is among the established manufacturers in this market.
The business is divided into two segments: Home & Business Solutions serves residential and commercial systems, usually via installers and wholesalers. Large Scale & Project Solutions addresses project developers, solar park operators, utilities, institutional investors and plant builders (EPCs). Revenue arises from the sale of hardware, complemented by service and software offerings. In terms of competition, SMA faces mainly providers from Asia, which operate strongly on price and economies of scale. SMA counters this with quality, grid integration, system solutions and proximity of service, especially in Europe.
Score profile
Rank vs. Solar (8 companies). 10 = top of the group, 5 = middle. Calculated from the metrics below, without AI.
Metrics compared with the industry
On profitability and quality, SMA Solar Technology ranks below average in the group Solar (3.4/10). On growth, the company ranks in the middle in the group Solar (5.3/10). On valuation (higher = cheaper), the stock ranks in the middle in the group Solar (4.4/10). On financial strength, SMA Solar Technology ranks in the middle in the group Solar (5.1/10).
| Metric | Stock | Group median | Ranking |
|---|---|---|---|
| Forward P/E | 11.8x | 18.4x | better than 69 % |
| PEG ratio | 0.8x | 0.8x | better than 50 % |
| EV/EBITDA | -33.8x | 19.6x | better than 0 % |
| Price/sales | 1.1x | 1.2x | better than 56 % |
| Price/book | 3.8x | 3.4x | better than 42 % |
| Revenue growth | -3.2% | -10.1% | better than 69 % |
| Earnings growth | 0.0% | 0.0% | better than 38 % |
| Gross margin | 13.6% | 24.6% | better than 6 % |
| Operating margin | 14.2% | 9.1% | better than 69 % |
| Net margin | -4.4% | 1.9% | better than 31 % |
| Return on equity | -13.9% | -5.9% | better than 31 % |
| Debt/equity | 21.3% | 35.4% | better than 56 % |
| Current ratio | 1.4x | 1.9x | better than 19 % |
| Free cash flow yield | 8.1% | 3.5% | better than 79 % |
| Dividend yield | 0.0% | – | – |
| Payout ratio | 21.7% | 21.7% | – |
| Beta | 0.77 | 1.58 | – |
Valuation: what is SMA Solar Technology worth?
Two valuation approaches – a discounted cash flow model and a valuation at the industry’s median multiples – give SMA Solar Technology a model range of 52.81 EUR to 86.00 EUR per share.
4 analysts, average rating “Buy”, average price target 71.50 EUR (+49.1%).
The full DCF matrix, the reverse DCF (what growth the price implies) and scenarios are part of the Pro analysis.
What the business depends on
- The build-out of photovoltaic and storage systems determines demand for inverters in both segments.
- Support frameworks, grid connection rules and electricity prices influence the willingness to invest of residential, commercial and institutional customers.
- Production utilization, product mix and service share shape the profitability of the business.
Risks
- Price pressure from Asian competitors with large economies of scale can weigh on margins in the inverter business.
- Political interventions, for example changes in subsidies or trade rules, can abruptly change demand in individual markets.
- Inventories in the distribution channel and fluctuating component prices complicate planning and lead to sharp earnings fluctuations.
What to look for with SMA Solar Technology
The EBITDA margin shows whether SMA retains earnings power in the hardware business despite price pressure and fluctuating utilization, and can cover fixed costs.