Key Takeaways:
- Strategic Pivot: Solaria (SLR) is evolving from a pure-play solar generator into a multi-faceted energy player, with a massive push into data centers and energy storage (BESS).
- Price Projection: Our model suggests a long-term target price of €20.42 per share by December 2029.
- Expected Returns: The stock could see as high as 21% returns in the next 2 years.
- Massive Scale: The company plans to finish 2025 with 3 gigawatts (GW) of installed capacity and is targeting 9 GW by 2027.
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Solaria Energía y Medio Ambiente (SLR) is no longer just a solar company. While it remains a leader in Iberian photovoltaic technology, the company is undergoing a transformation by diversifying into the high-demand world of AI and data infrastructure.
The stock has staged a dramatic recovery, currently trading around €18/share. CEO Arturo Diaz-Tejeiro recently highlighted that the company is “extremely excited” about its new data center division, which leverages Solaria’s existing grid connections and land bank.
With over 4.4 GW of capacity currently under construction or connected, Solaria is transforming into a diversified energy powerhouse.
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What the Model Says for SLR Stock
We evaluated Solaria’s potential by looking out to December 2029, factoring in the capital-intensive nature of its transition into batteries and data centers.
Using a forecast of 27.3% Revenue Growth (CAGR) and robust 67.3% Operating Margins, our model projects a target price of €21.39 by late 2027.
This assumes an Exit P/E Multiple of 12.7x, reflecting its transition toward a more stable, utility-like earnings profile.
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In the long run, our advanced model assumes a normalization of revenue growth to 17.6% CAGR, leading to a target price of €20.42 by 2029.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for SLR stock:
1. Revenue Growth: 27.3%
27.3% Solaria is in hyper-growth, aiming for 3 GW of solar capacity by end-of-2025 and a massive 9 GW by 2027. Beyond solar, the company is pivoting into AI data centers and battery storage (BESS) using existing grid connections.
The company expects momentum from its Generia division, which offers land and grid solutions for AI companies seeking sustainable energy. This diversification creates a high-margin recurring revenue stream independent of power price volatility.
2. Operating Margins: 67.3%
Solaria maintains industry-leading margins through an in-house model that manages every stage from land acquisition to grid connection. This integration allows for record-low CapEx, such as battery storage costing just €75,000 per MWh.
Long-term Power Purchase Agreements (PPAs) support margin maintenance by locking in prices and insulating the company from price volatility. Predictability allows the company to fund massive expansion through cash flow and efficient project finance.
Management targets sustainable margins by remaining the lowest-cost developer while scaling high-margin data center verticals.
3. Exit P/E Multiple: 12.7x
SLR stock currently trades at multiples reflecting hyper-growth, though our model assumes a transition toward a stable “green utility” valuation.
We maintain an Exit P/E of 12.7x, providing a significant margin of safety for investors as the company matures its pipeline.
Dominant Iberian grid access and a vertically integrated model should support attractive valuations as AI infrastructure begins to scale.
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What Happens If Things Go Better or Worse?
Different scenarios through 2029 highlight the impact of Solaria’s strategic pivot (these are estimates, not guaranteed returns):
- Low Case: If construction delays occur or battery margins underperform → (3.2%) annual return.
- Mid Case: If the company successfully scales its data center and storage units → 3.6% annual return.
- High Case: If Solaria becomes the leader in Iberian solar + battery integration → 10.0% annual return.
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How Much Upside Does Solaria Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
