Enphase Earnings Prove It Is the Real Deal in Alternative Energy

By Jon C. Ogg Published Aug 6, 2:25PM EDT

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Enphase Energy Inc. (NASDAQ: ENPH) managed to more than please investors after the company reported its second-quarter earnings Tuesday evening. 24/7 Wall St. has visited this small cap and lesser-known solar player’s long-term opportunity as a stock before, and the report shows that Enphase is the real deal. We have also had analysts chime in on the company with a positive outlook.

One caveat that any investor needs to know is that the company is subject to “good hits and bad misses” if you have followed its history. That means that it can really rise or really fall — even more than other solar stocks in some cases. To prove that it can be volatile: Enphase’s stock gain of almost 20% was the largest percentage gainer on both Nasdaq and New York Stock Exchange trading on Wednesday afternoon.

Enphase reported record revenue of $82.0 million. This was up by a sharp 41%. The solar player also posted roughly breakeven non-GAAP earnings, versus a prior loss. Enphase further said that it shipped 132MW of microinverter systems, up 54% from a year ago.

This stock was reiterated as Buy and the price target was raised to $12 from $11 at Canaccord Genuity after it beat earnings. A firm called Northland Securities also reiterated its Outperform rating, but the firm raised its target to $13 from $9. We have not yet seen the entire call, but Enphase’s price target appears to have been raised to $15 from $10 at Roth Capital as well.

While we noted we had visited Enphase’s growth prospects before, this stock was one of our top small-cap alternative energy stocks with massive upside.

What makes Enphase so different from other solar stocks is that it is not a PV panel maker. The company makes microinverter systems for the solar photovoltaic industry, which helps get the energy coming into the panels out into the grid, or into whatever destination, as electric power.

Enphase Energy shares were up almost 20% at $11.63 in mid-afternoon trading on Wednesday. Its stock hit a daily high of $12.15, and the 52-week trading range is $4.54 to $12.19.

It seems as though the only issue with the analyst calls made so far on Wednesday is that their targets may simply not have been raised enough. The consensus price target from analysts is still lower than the share price, so perhaps more price target hikes are coming.

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. a673b.bigscoots-temp.com.