Enphase Energy Inks Deal to Buy ClipperCreek; Shares Gain

Enphase Energy, Inc. (ENPH), a global energy technology company, has inked a deal to snap up ClipperCreek. The financial terms of the deal have been kept under wraps.

Following the news, shares of the supplier of microinverter-based solar and battery systems rose 2.8% to close at $251.59 on Tuesday.

Based in California, ClipperCreek provides electric vehicle (EV) charging solutions for residential and commercial customers in the U.S. Since its inception, the company has sold over 110,000 Level 2 AC charging stations.

The acquisition is likely to conclude by December 31, 2021, subject to customary closing conditions.

Benefits of the Acquisition

The deal is expected to expand Enphase’s domestic manufacturing footprint and provide it distributors and installers globally. Further, the move complements the company’s plan of enabling bi-directional charging capability for vehicle-to-home and vehicle-to-grid applications.

EV Market

According to Enphase, EV sales are expected to grow more than 40% annually in the U.S. over the next five years. Notably, the rising momentum of EVs is likely to create a need for home energy management on significant use of power with an EV by households, along with using a large battery for both backup and grid services. Therefore, through this acquisition, Enphase is expected to leverage its power conversion and software platform to manage loads and resources within the home.

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CEO Comments

The CEO of Enphase, Badri Kothandaraman, said, “We were immediately drawn to ClipperCreek’s strong consumer brand, excellent product quality, and emphasis on customer experience…We look forward to building upon the current product base while adding smart features such as cloud connectivity, integration into the EnsembleOS platform and bi-directional charging in the future. Managing EV charging is an integral part of our strategy.” (See Enphase stock charts on TipRanks)

Analysts Recommendation

Recently, Needham analyst James Ricchiuti maintained a Buy rating on the stock and raised the price target to $266 (5.73% upside potential) from $210.

Shares of Enphase have exploded 101.1% over the past year and scores a Strong Buy consensus rating based on 12 Buys versus 2 Holds. The average Enphase price target of $224.85 implies 10.63% downside potential to current levels.

Risk Analysis

According to the new TipRanks’ Risk Factors tool, the Enphase stock is at risk mainly from two factors: Finance and Corporate, and Tech and Innovation, which contribute 34% and 16%, respectively, to the total 61 risks identified for the stock.

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