Friday Jan 27, 2023

Enphase Stock is Running on All Cylinders – Entrepreneur

Solar energy products maker Enphase (NYSE: ENPH) stock has been selling off with the solar stocks and benchmark indexes despite impressive growth. The worldwide market leader in microinverters saw 55.8% revenue growth in its Q4 2021 earnings despite logistics and supply chain disruption. Enphase specializes in the components that enable consumers and businesses to help convert solar energy into electricity to power devices, machines, and systems. The Company saw 80% growth in the Asia-Pacific region. The acquisition of ClipperCreek enables more electric vehicle charging solutions among its portfolio of products which include solar, batteries, grid services, load control and compatibility with most third-party generators. Enphase is one of the few solar companies that’s actually making profits while experience hypergrowth. Rising crude oil prices has bolstered interest in the solar energy industry. Prudent investors seeking exposure in the clean and renewable energy sector can watch for opportunistic pullbacks in shares of Enphase.

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Q4 Fiscal 2021 Earnings Release

On Feb. 8, 2022, Enphase released its fiscal Q4 2021 results for the quarter ending in December 2021. The Company reported an earnings per share (EPS) profit of $0.73 excluding non-recurring items, beating consensus analyst estimates for a profit of $0.59, by $0.14. Revenues grew 55.8%  year-over-year (YoY) to $412.72 million versus $399.62 million consensus analyst estimates. The Company ended the quarter and year with $1 billion in cash and cash equivalents generating $97.2 million in cash flow. The Company completed its acquisition of ClipperCreek which offers electric vehicles charging solutions for both commercial and residential customers in the U.S.

Upside Guidance

Enphase raised its revenue guidance for fiscal Q1 2022 in the range of $420 million to $440 million versus $407.16 million consensus analyst estimates. Non-GAAP gross margins are expected in the range of $38% to 41%. Non-GAAP operating expenses are expected within a range of $67.5 million to $70.5 million, excluding $63 million in stock based compensation.

Conference Call Takeaways

Enphase CEO Badri Kothandaraman commented that they sold 3 million microinverters and 100.2 megawatt hours of IQ batteries generating $412.7 million in revenues and a non-GAAP gross margin of 40.2%. The Company has started production of IQ8 microinverters. He noted, “The ramp of our batteries has significantly increased call volumes as new installers learn how to commission the system and homeowners learn about the system’s features. We are not happy about the higher wait time, and we are working on it to reduce it under a minute through staffing and training. During Q4, we also increased the number of field service technicians in the U.S. and Europe to provide onsite help to our installers, particularly on batteries.” The Company added a fully automated line in Mexico bringing up quarterly capacity to 2.25 million microinverters. With the existing capacity in China, Enphase can produce 5 million microinverters worldwide per quarter. The Company plans to add another automated line in Europe by the end of 2022 to meet customer demand and provide better service. Lead times on batteries are still 14 to 16 weeks due to challenges with logistics and supply chain disruption, which the Company feels is transitory. The Asia-Pacific region produced 80% YoY revenue growth and the Company expects the recovery from COVID restrictions and favorable regulatory changes to drive further growth. Batteries will be introduced in Australia in late 2022. The Enphase installer network (EIN) has grown to 1,130 installers selected through a highly selective process that focuses on quality and homeowner satisfaction. He concluded, “In summary, we are pleased with our overall performance. As a reminder, our strategy is to build best-in-class home energy systems and deliver …….

Source: https://www.entrepreneur.com/article/419852

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