uploads///Enphase energy earnings

Enphase Energy’s Q2 Earnings: Record Growth


Jul. 31 2019, Published 9:04 a.m. ET

  • Enphase Energy’s Q2 earnings and revenues beat the estimates.
  • So far, the stock has risen more than 350% this year.

Enphase Energy (ENPH) stock rose more than 15% in extended trading hours after reporting better-than-expected earnings on Tuesday. The company beat analysts’ revenue and earnings estimates for the second quarter. The second-quarter numbers could open up a new upside for the stock. Enphase Energy stock has already risen 350% this year.

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Strong performance continues

Enphase Energy reported an adjusted EPS of $0.18 in the second quarter compared to $0.01 in the second quarter of 2018. The company became profitable in the fourth quarter of 2018. Enphase Energy has been profitable for three consecutive quarters.

In Enphase Energy’s Q2 earnings, it reported total revenues of $134.0 million for the quarter ending June 30. The company had top-line growth of almost 77% compared to the same quarter last year. The growth was mainly driven by increased solar microinverter and AC module shipments. The IQ7 series shipments accounted for 98% of all the microinverters shipped. The IQ 7 series microinverter produces 4% more power than series 6 microinverter.

Last month, Enphase Energy announced that more than 500 solar installation companies in the country profited from reduced solar design complexities by using its AC modules. The AC Modules are a combination of microinverter and photovoltaics, which are faster and cost-efficient.

Enphase Energy’s growth outlook

Enphase Energy’s management expects strong growth to continue in the next few quarters. Since the solar industry will likely grow, there’s huge growth potential ahead for Enphase Energy—the key technology provider for panel makers. In the third quarter, the company expects its revenues to be $170.0 million–$180.0 million. In the third quarter of 2018, Enphase Energy posted revenues of $78.0 million. The company expects its third-quarter gross profit margin to be 33%–36%, which is more or less in line with the second quarter. According to Greentech Media, Huawei’s exodus due to trade war tensions supported Enphase Energy’s second-quarter revenues. Huawei is a Chinese microinverter maker.

SolarEdge Technologies (SEDG) is expected to report its second-quarter earnings on August 6. Analysts expect notable growth in SolarEdge’s second-quarter revenues. So far, the stock has risen more than 80% this year.

Enphase Energy stock looks strong despite trading close to overbought levels. Cowen and Company raised its target price from $23.0 to $27.5 on Wednesday. Based on the consensus estimates, Enphase Energy has a mean target price of $20.7, which implies an estimated downside of more than 4% for the next 12 months. The company closed at $21.65 on Tuesday. Among the nine analysts covering Enphase Energy stock, five recommended a “buy,” one recommended a “strong buy,” two recommended a “hold,” and one recommended a “sell.”

To learn more, read Solar Stocks: Sunnova’s Debut, Q2 Earnings, and More.


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