The saga of SolarEdge Technologies (NASDAQ: SEDG) has been well-documented here. Most recently, I wrote about my 13-month roller coaster ride with the company; a position I finally managed to exit profitably last week. (For more information, see last week’s article: Perseverance Pays Off With SolarEdge). But as I noted last week:

To be clear, I have not yet issued a Sell recommendation on SolarEdge. I don’t believe it is yet fully valued, it’s just that I feel most of the upside is gone in the short term. SolarEdge is now up 83% year-to-date, and I have some concerns about a pullback. The past year showed how quickly things can change in the solar sector, and I needed to lighten up on the sector. If you are a long-term investor, it’s still probably a good pick for your portfolio, but shares could be susceptible to a short-term correction. Should I decide to update guidance for SolarEdge, I will provide that update in The Energy Strategist.

SolarEdge released earnings yesterday, and they were outstanding. Here are some highlights from the company’s press release:

• Record revenues of $136.1 million, up 18% from the prior quarter and up 9% year-over-year (YOY).
• GAAP gross margin of 34.6%, up from 33.6% in the prior quarter and up from 31.4% YOY.
• GAAP net income of $22.5 million, up 59% from $14.2 million in the previous quarter and up from $17.3 million YOY.
• Record non-GAAP net income of $25.8 million, up 57% from $16.5 million in the prior quarter and up from $19.9 million YOY.
• GAAP net diluted earnings per shares of $0.50, up from $0.32 in the previous quarter and up from $0.39 YOY.

The share price has soared 20% on the earnings release and is now up 120% year-to-date as I write this. If you have been in since the initial recommendation, then your position is up by 44%. If you bought it later, you probably did a lot better than that since it fell during the second half of 2016. 

In the wake of earnings, analysts are upgrading the company and raising the price targets. For example, today Cowen raised the target to $31. My buy limit was $25, but it has blown through that today. 

I think SolarEdge still has a great long-term future, and if you are a long-term investor looking for exposure to the solar sector, SolarEdge is a great place to be. But if you are sitting on some big gains at this point, I would recommend taking some off the table. I am going to officially recommend to sell half of your position, but I am going to keep the company in the portfolio with the Buy limit unchanged. 

For long-term investors, that means that if SolarEdge dips back below $25 (currently at $27.65), you should consider buying on the dip. For more aggressive investors, consider letting your shares ride but put a stop loss in place to protect your profits. 

I will reiterate that this one has been a lesson in patience and a belief that the company’s strong fundamentals would eventually pay off. For those who stuck it out during the ups and downs, congratulate yourself on this win. 

Sell half of your position in SolarEdge above $26.