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Enphase » ENPH // Info Tech Sector // Strike Price = $xx {subscribe}
// STATING THE CASE
Enphase designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry in the US and internationally. Their claim-to-fame is micro-inverters which enable control at the individual solar module level. Big improvement over string inverters because when one goes out the whole string goes with it. Enphase is also expanding to other aspects of home energy – battery storage, EV charging, etc. They have manufacturing facilities in the US, Mexico, India and Europe. They were inc’d in 2006. They are solar energy nerds. We expect them to become a household name in the home energy solutions market.
Their TTM revenue is $2.62B and has grown at a 26% CAGR the past decade.
Their current operating margin of 21.4%. It was 16.9% in 2019. That’s the year their EPS turned positive and it has grown at a 21% CAGR since.
Their FCF has grown at 43% CAGR in the past 9.5 years.
Over the next 4 years analysts expect their EPS and revenue to grow at a 16% CAGR.
Their ROIC is 21.5% and they have $1.78B in cash with $1.2B in long-term debt. Debts are a little high but their return on capital is impressive.
Last quarter their EPS was $1.37 for a 15 cent beat. This quarter the EPS expectation is $1.27 and revenue of $726M. They haven’t not beat expectations since 2018.
They have major secular tailwinds. These days, any homeowner in a sunny climate without access to hydropower is crazy to not be considering installing a home energy solution.
The stock is down 47% from its high of almost $340 in Dec 2022 and only 19% above its 52 week low of $152.
Over the past 10 years the stock price has grown at a 39.5% CAGR.
Earnings call on Thursday …
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