Enphase Energy Stock Forecast: On the political stage, the debate over renewable energy rages. Lobbyists pressure lawmakers to protect and promote traditional energy sources, while proponents of renewable energy technology push a transition to clean alternatives. Meanwhile, in the background, renewable energy companies are growing.
They have designed less expensive and more reliable ways to capture wind and solar power, and they are persuading homeowners and commercial real estate developers to integrate alternative energy sources into new and existing building plans.
Investors have taken notice, and many have elected to add alternative energy stocks to their portfolios. While individual companies face the same challenges as any other business, the industry as a whole is growing rapidly. The question is, which solar energy stock offers the best chance of success, both in the short-term and the long-term? Some analysts say the right choice for today’s buyers is Enphase Energy.
Renewable Power Capacity Set To Soar
The truth is, it doesn’t matter whether governments make the transition to renewables easy or hard. Either way, it’s coming. Consumers are concerned with reducing pollution, bringing their energy costs down, and decreasing their reliance on fossil fuels.
According to the International Energy Agency, renewable power capacity will go up by 50 percent in the five-year period from 2019 to 2024, and solar power will be responsible for more than half of the growth.
That’s a worst-case scenario. If global leaders sort out the current policy and regulatory issues, the rate of expansion will be even higher.
Solar power is the most popular choice for powering homes and commercial buildings, because advanced technology has reduced the initial expenses associated with installation of collection and storage systems.
Today’s solar panels are smaller, more efficient, and more reliable than their predecessors, and the companies producing them are generating solid profits.
Enphase Energy Game-Changing Technology
Enphase Energy [NASDAQ: ENPH] has made its mark in the solar industry by developing innovative solutions that make it easy to integrate solar power into existing structures.
The company is a leading solar microinverter supplier in the global marketplace, and it offers a smart platform that combines solar generation technology with a comprehensive storage and management system.
Enphase Energy [NASDAQ: ENPH] uses a semiconductor-based microinverter system to convert energy at the solar module level, then relies on advanced technology to make the process of generating, storing, and managing solar energy simple for users.
The platform’s reliability – and its intuitive user interface – have made it a top choice for consumers transitioning homes and businesses to renewable energy sources.
Enphase is now introducing its newest technology, which promises to transform the solar industry to its very core. The Ensemble solar system is capable of forming its own microgrid without storage.
Enphase is the only company with a microgrid-forming energy solution that makes storage optional, and industry analysts believe it will be a game-changer. Enphase will have opportunities to enter new markets, and it is likely to disrupt the existing solar marketplace along the way.
Solar Energy Competitors to Enphase Energy
Enphase Energy [NASDAQ: ENPH] has been recognized around the world for the quality and innovation of its solar energy technology.
In 2015, it was added to Grid Edge’s list of the top companies disrupting the US energy market, and in 2017, GTM Research named Enphase the number one residential PV monitoring system.
Green Builder put Enphase solar technology on its list of 50 hot building products in 2018, and that same year, Enphase was given Solar Solutions’ Solar Innovation Award.
For the moment, Enphase only has one real competitor – SolarEdge. The two have enjoyed massive gains since the start of 2019, thanks to changes in the US electrical code. Combined, Enphase and SolarEdge [NASDAQ: SEDG] currently hold almost 90 percent of market share for US residential solar system inverters.
Of course, it is unlikely these two companies can hold onto that market share forever. The biggest risk investors face is the introduction of advanced technology by other industry players. Will that happen in the next few months? Probably not.
But it’s sure to come eventually, and Enphase’s long-term prospects depend on its ability to adapt and produce ever-more-advanced solar solutions.
Is Enphase Energy A Buy?
Enphase Energy [NASDAQ: ENPH] announced solid results during its third quarter earnings call. Total revenue came in at $180.1 million, which represents a 34 percent increase over the previous quarter, and a 131 percent increase year over year.
Safe harbor revenue accounted for approximately $8 million of the third quarter totals. GAAP net income totaled $31.099 million, which was an improvement over the second quarter’s $10.618 million.
Year over year, the numbers look even better. For the third quarter of 2018, the company reported a net loss of ($3,470 million).
Business leaders expect fourth quarter revenues to grow, estimating totals will range from $200 million to $210 million.
This figure includes approximately $35 million in safe harbor revenue. Interestingly, shareholders were not impressed by these numbers, and stock prices dropped significantly. It is unclear why the selloff occurred, but some analysts have theorized that there may be concerns with slowing growth.
So, with that said, is Enphase Energy a buy?
Enphase Energy Stock Forecast
It’s true that Enphase Energy share prices dropped after it announced its third quarter earnings, and that decline was significant – nearly a quarter of its value. However, the tumble was only dramatic because the stock had gone up so quickly. Since the beginning of the year, shares have increased by 444 percent.
Analysts believe Enphase shares could see prices of $30 per share or more over the next 12 months – an upside of 50 percent to 60 percent for those who buy today. That means shares are trading at what is essentially a discounted rate. This may be the perfect time for investors who want to enter the solar energy market to buy.
Learn more about investing in renewable energy from the experts at Financhill – where many of the world’s smartest investors go for information.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.