Enphase stock looks convincing at $ 130 – Trefis

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Enphase Energy (NASDAQ: ENPH), a company best known for its solar microinverters – components that convert direct current produced by solar panels into AC usable by the grid – saw its inventory rise 12% last week (five trading days) for about $ 131 per share. The larger S&P 500 rose 1.4% over the same period. The recent gains likely come as investors see the stock’s value after the big sell-off after its first quarter results released in late April (see update below), and possibly due to the launch by the company with a new $ 500 million share buyback program. So is Stock Enphase Energy about to increase further or could it see a decline from current levels? According to our machine learning engine, which analyzes historical stock price data, Enphase stock has a 57% chance of rising in the next month (21 trading days) after rising 12% in the five last days. See our analysis Chances of increasing Enphase energy store for more details.

Is Enphase Stock Now a Buy for Long-Term Investors? We believe so. The stock appears to be worth reasonably good value now, trading at around 65x forward earnings, well below the multiples of over 90x it was trading just three months ago. Enphase largely justifies this valuation by its high growth rates and relatively thick margins. Enphase sales are expected to increase by around 70% this year and 35% next year and the long-term outlook also looks good, given the aggressive decarbonization targets of the Biden administration. Enphase, which is regarded as the go-to microinverter company, is expected to benefit from the expanding market. Enphase’s margins also remain well above those of other solar companies, with gross margins of around 41%, compared to around 34% for rival inverter maker Solar Edge and 20% for solar panel makers such as First Solar and SunPower.

[4/29/2021] Enphase hit by semiconductor shortage, time to buy?

Enphase Energy (NASDAQ: ENPH), a company that produces solar microinverters, saw its stock drop 5% last week (five trading days) to around $ 147 a share. The sale came as Enphase’s second-quarter revenue forecast fell short of Street’s estimates, as the company noted it would be affected by the current semiconductor shortage. The stock fell nearly 14% on Wednesday alone. So is Stock Enphase Energy on the verge of falling further or could it see a recovery? According to our machine learning engine, which analyzes historical stock price data, Enphase stock has a 55% chance to rise in the next month (21 trading days) after falling 5% in the past. last five days. See our analysis Chances of increasing Enphase energy store for more details.

So should long-term investors consider Enphase? Enphase stock is trading at around 68 times consensus 2021 earnings and around 52 times 2022 earnings. While the multiple seems high, Enphase more than justifies this valuation, due to its high growth rates, relatively thick margins and its strong long-term outlook for the renewable energy market. Microinverters convert the direct current produced by solar panels into alternating current which can be used by the grid and homes and are less commoditized than solar panels. As a guide, Enphase’s gross margins are around 40%, compared to solar panel manufacturers such as SunPower (NASDAQ: SPWR) and First Solar (NASDAQ: FSLR) which generally show margins of around 20%. Growth is also expected to remain strong, given the increased urgency to tackle climate change and a more supportive regulatory environment under the Biden administration, which intends to decarbonise the U.S. electricity industry by 2035. Enphase’s revenues are expected to increase by over 73% this fiscal year. next year and 33% next year, according to consensus estimates. Today, although the semiconductor shortage is hurting supply growth this year, the long-term demand picture remains intact with margins also remaining robust. With the stock down more than 30% from its historic highs, this could be a relatively attractive entry point.

[1/12/2021] Which stock of solar inverters should you choose?

Solar stocks have performed well over the past year, driven by low interest rates and the recent US presidential election, which saw the Democratic Party – seen as pro-renewable energy – regain a government trio . Two of the top performing stocks are power electronics suppliers Solar Edge (NASDAQ: SEDG) and Enphase Energy (NASDAQ: ENPH), which are up approximately 2.5x and 7x respectively from last year. Investors are betting that components like inverters and associated power electronics, which are less commoditized than solar panels, could offer larger margins in the long run. So which of the two companies might be the best choice for investors? Check out our full dashboard analysis at Enphase Energy vs. SolarEdge Technologies for a detailed breakdown of the financial and valuation parameters of the two companies.

Overview and finances

Enphase is best known for its microinverters that connect to individual solar panels and convert the direct current (DC) produced by the panel into alternating current (AC) used by the grid and homes. SolarEdge, on the other hand, offers power optimizers that connect to individual panels and centralized inverter systems that convert direct current to alternating current.

Enphase’s revenue has grown from approximately $ 286 million in 2017 to approximately $ 624 million in 2019, which translates into a growth rate of approximately 48% each year. SolarEdge’s revenues, which are more than double that of Enphase, grew from about $ 607 million to about $ 1,426 million over the same period, a growth rate of about 53% per year. year. However, over the past 12 months, Enphase has seen its revenue increase by 42.1% – well above the 19% figure for SolarEdge, as the company gained market share in the microinverter space. Enphase’s operating margin was 15.2% for the most recent twelve-month period, which is higher than SolarEdge Technologies’ operating margin of 13.2% for the same period. Enphase’s margins also trended upward, from 0.8% in 2018 to 15.2% in the past 12 months, while SolarEdge’s margins declined slightly from 15% to 13.2 %.

Enphase’s high valuation and overdependence on the United States is cause for concern

While Enphase’s recent stronger growth and expanding margins make it attractive relative to SolarEdge, its extremely high valuation remains a concern. The company trades around 37 times its end revenue, compared to around 12 times for SolarEdge. That’s even higher than most names in high growth technology and software. In addition, the company’s revenue is also very concentrated, with the United States accounting for 83% of its revenue in the first 9 months of 2020, compared to SolarEdge which is more diverse. The US residential solar market, which is a key end-market for Enphase, has not grown too fast and this could hurt the business as well. Given this, we believe SolarEdge, which is trading at a lower valuation, may be the best value for investors.

While the Enphase stock may have moved, 2020 has created many price discontinuities that can provide some interesting trading opportunities. For example, you will be surprised at how the valuation of stocks for Hawaiian Electric Industries v Tempur Sealy International shows a disconnect with their relative operational growth. You can find a lot of them discontinuous pairs here.

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