Enphase Energy Pops 6% After 4Q Profit Surprises


Shares of Enphase Energy rose 5.6% in after-market trading on Feb. 9 as the solar energy company delivered a strong set of numbers.

During the fourth quarter, Enphase’s (ENPH) revenue increased 26% year-on-year to $264.8 million, topping analysts’ expectations by $10.46 million. The company reported diluted earnings per share (EPS) of $0.51, beating the Street consensus of $0.40. Shipments of its storage systems increased 35% sequentially in 4Q.

For fiscal 2020, the company’s revenue increased to $774.4 million from $624.3 million year-on-year. Earnings rose to $1.37 per share from $0.95 per share during the same comparative period.

In the current quarter, Enphase completed the acquisition of Sofdesk, which provides design software for home solar installers and roofing companies.

Enphase also announced an agreement to acquire India-based DIN Engineering Services’ solar design services business. The company expects these acquisitions to help improve its digital platform, enable its installers to simplify sales process and enhance the experience of homeowners. The deal terms were not disclosed.

“We look forward to working with the team at DIN to improve installer experience and reduce solar soft costs,” Enphase CEO Badri Kothandaraman said.

Enphase forecasted first quarter sales to be in the range of $280 million to $300 million. Gross margin is forecasted to come in between 38% to 41% in 1Q. (See Enphase stock analysis on TipRanks)

On Feb. 9, B. Riley Financial analyst Christopher Souther raised the stock’s price target from $108 to $151 (25% downside potential), but reiterated a Hold rating. Christopher sees the investor interest in the sustainable energy and technology sector continuing but does not expect the expansion seen over the past year to be a driver for Enphase shares in 2021.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating. That’s based on 7 Buys, 3 Holds and 1 Sell. The average analyst price target of $200.70 implies that the stock is fully priced at current levels. That’s after shares exploded 382% over the past year.

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