Enphase Energy Inc (NASDAQ:ENPH) isn’t the kind of stock that attracts a lot of attention. But those who have been following it know that its growth over the last few years has been phenomenal.
In May 2017, Enphase Energy Inc stock was trading around $0.70. On October 6, 2020, it hit a new all-time high of $99.66; for a 3.5-year gain of 14,137%!
ENPH stock has had great momentum over the last year, too, increasing 304% year-over-year, up 273% in 2020, and rallying 353% since bottoming in March.
Even with these strong gains, ENPH stock continues to have solid upside, though it may give up short-term ground to profit-taking. Enphase Energy stock has more momentum than most, up 42% over the last eight trading days.
Some of those gains are a result of broad-based investor optimism. A number of analysts have also jumped on board with bullish sentiment, raising their 12-month price target to a high of $93.00 per share.
As you can see in the following chart, the company has already blown past that consensus. Still, analysts are on board. Of the 15 analysts covering ENPH, the majority consensus is a “Buy” rating and none advise selling.
Chart courtesy of StockCharts.com
ENPH Stock Overview
Enphase Energy Inc is a global energy technology company and the world’s leading supplier of solar microinverters, The company provides solar energy cells and monitoring equipment to homeowners, distributors, installers, original equipment manufacturers, and strategic partners. (Source: “Enphase Investor Presentation, August 2020,” Enphase Energy Inc, last accessed October 6, 2020.)
Enphase has more than 300 issued patents and has shipped more than 28 million inverters, representing more than eight gigawatts (GW), equal to 1,000 megawatts or one billion watts.
To put that into perspective, eight GW is the equivalent of 25 million photovoltaic panels, 3,296 utility-scale wind turbines, 880 million LEDs, and 10.4 million horses. (Source: “How Much Power is 1 Gigawatt?,” Office of Energy Efficiency & Renewable Energy, last accessed October 6, 2020.)
Q2 Adjusted Net Income of $23.5 Million
In August, Enphase announced that revenue for the second quarter ended June 30 slipped 6.3% year-over-year and 39% sequentially to $125.5 million. During the quarter, the company shipped approximately 355 megawatts, or 1.87 million microinverters.
(Source: “Enphase Energy Reports Financial Results for the Second Quarter of 2020,” Enphase Energy, Inc., August 4, 2020.)
The company reported a second-quarter net loss of $47.3 million, or a loss of $0.38 per share, compared to second-quarter 2019 net income of $10.6 million, or $0.08 per share. Adjusted net income came in at $23.5 million, or $0.17 per share, compared to $23.1 million, or $0.08 per share, in the same prior-year period.
Second-quarter 2020 adjusted gross margin increased to a record 39.6% from 39.5% in the first quarter of 2020. Adjusted operating expenses decreased to $26.0 million from $28.5 million in the first quarter of 2020.
Enphase exited the second quarter with $607.3 million in cash and generated $25.4 million in cash flow from operations.
During the quarter, Enphase expanded into Poland and announced two new strategic partnerships. It also began shipping its “Encharge” energy storage system to North American customers in June, allowing homeowners to easily generate, store, and control energy with technology designed by Enphase.
Enphase’s Q3 Outlook
For the third quarter of 2020, Enphase expects to report:
- Revenue in a range of $160.0 million to $175.0 million, compared to Q3 2019 revenue of $180.0 million
- Gross margin in a range of 36% to 39%, compared with Q3 2019 gross margin of 35.9%
- Operating expenses in a range of $41.0 million to $43.0 million vs. Q3 2019 operating expenses of $31.0 million
Enphase Energy Inc is a great tech stock when it comes to long-term growth. Despite COVID-19, ENPH stock is trading at record levels, up 304% year-over-year and up 353% since the pandemic-fueled sell-off in March. The company has a resilient business model that allows it to generate strong cash flow even during difficult economic periods. That said, it experienced a rebound in customer demand in June and July. Longer-term, management said it is well-positioned to accelerate the introduction of new products over the next 18 months.