Enphase Energy Inc. (NASDAQ: ENPH) has reported another loss for the quarter, and the −$0.28 from operations and −$0.40 per share net earnings did not live up to expectations. Still, Enphase shares are rallying on Wednesday after one firm said that this stock might actually double.

Enphase was raised to Outperform from Perform by Oppenheimer, and the firm’s new $2 price target is up 99% from a $1.01 closing price. A rival analyst call ahead of earnings had even a much higher price target of $3, implying almost 200% upside, if proven right.

It appears that Enphase, which has a mere $60 million or so in market capitalization, is executing on its own cost reduction program. Oppenheimer also sees it making material progress on its energy storage offering.

Oppenheimer lowered the forward annual loss estimates handily. For 2016, that loss was −$1.31 per share, now −$1.29, but the 2017 estimate is now −$0.32 per share rather than the prior −$0.84. The company’s own guidance for the coming quarter was $90 million to $100 million (versus a $92.7 million consensus) with gross margin at 16% to 20% (16.7% consensus).

Oppenheimer’s Colin Rusch said:

We highlight that in its first quarter of sales, Enphase has reached approximately $70 million-plus in pre-orders and should begin to see sell-through in the fourth quarter of 2016. We also believe it is picking up share in the U.S. residential solar market as it passes on cost reductions to customers along with introducing its AC modules with several module partners including LG. We are bullish on AC modules picking up share as the benefits from faster installation outweigh additional expense. We are introducing a $2 price target based on 0.3x 2017 estimated revenue of $412 million… We believe this is a discount to differentiated energy technology peers and appropriate due to price competition in solar and Enphase’s history of losses.

Oppenheimer’s investment thesis said:

We believe Enphase is the clear leader in micro inverters and continues to grow with core markets while expanding its addressable market segments. We expect Enphase’s energy storage solution will gain meaningful traction in 2017 as the company begins to sell on three continents and in our view is likely to drive upside to the shares.

Enphase shares were last seen trading up almost 14% at $1.15 on Wednesday, in a 52-week range of $0.98 to $4.50. For whatever it is worth, this stock briefly traded north of $15 in 2014.

Enphase makes semiconductor-based microinverter systems for residential and commercial markets for solar power.

This company is very thinly followed by analysts, but Oppenheimer was not alone in its optimism from the current low share prices. Cowen maintained its Outperform rating and $3 price target ahead of earnings. Its even more favorable pre-call upside was based on an ability to grow margins, ramping product sales and storage offerings, attractive valuations and an improved balance sheet. Cowen’s research team said just days before this earnings report:

Our price target is calculated using a ~0.5x sales multiple on our 2017 sales estimate of $391.6 million. We remain bullish longer term on the Enphase story given the product cycle, but acknowledge the tough pricing environment in the first half of the year. The restructuring efforts and proceeds from the secondary offering should free up capital allowing Enphase to focus on ramping up its storage offering and continuing progress on the company’s aggressive 2017 cost reduction road map.

Cowen’s investment thesis ahead of earnings said:

Enphase is a U.S.-based company that produces microinverters and module-level power electronics for residential and small commercial PV systems. Enphase captured nearly 45% of the inverter market with its first to market microinverter, but has struggled to maintain market share due to increased pricing pressure and softer than projected demand in the US residential market. While competition has intensified over the past several quarters, we see next-generation product cycles, together with the company’s aggressive cost reduction road map, being able to take cost out to offset industry pricing declines. In addition, we are optimistic about the company’s entrance into the storage segment in 2016 which should allow it to offer a holistic energy management solution.

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