Why Enphase Energy (ENPH) Stock Surged 21% and What Analysts Have to Say About It

October 27, 2021 10:21 AM EDT
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Price: $247.42 --0%

Rating Summary:
    22 Buy, 14 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 12 | Down: 15 | New: 61
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Shares of Enphase Energy (NASDAQ: ENPH) are up more than 21% in today’s trading session after the company delivered strong Q3 results.

Enphase reported Q3 EPS of $0.60 to easily beat the analyst estimate of $0.48. Revenue for the quarter came in at $351.5 million versus the consensus estimate of $343.09 million.

“Strong demand for our microinverter systems continued in the third quarter of 2021, while shipments of our Enphase Storage systems increased approximately 51%, compared to the second quarter of 2021. Our Load Control feature gained significant adoption during the third quarter,” the company said in a press release.

For this quarter, Enphase Energy projects Q4 2021 revenue of $390 million to $410 million, better than the consensus of $370 million.

At least 8 analysts raised their price targets on ENPH post-earnings.

Needham & Company analyst Vikram Bagri raised the price target to $210.00 per share from the prior $195.00 on the Buy-rated stock to reflect higher projected long-term EPS growth based on the rollout of new products, ramp up in storage sales, and international expansions.”

“ENPH reported strong 3Q21 results that sharply exceeded our and consensus estimates. Besides the beat, the highlights of the quarter were higher than expected 4Q21 guidance, more upbeat commentary regarding managing the supply chain challenges, another price increase to offset higher costs and strong FCF generation. Mgmt's disciplined approach has allowed the company to better navigate logistical issues, add new component suppliers, add manufacturing capacity, and introduce new products and features. We look for the stock to move up sharply today given the clean beat, positive outlook and upbeat commentary,” Bagri said in a note sent to clients.

Northland Capital Markets analyst Gus Richard noted flawless execution from the management but reiterated a Market Perform rating due to high valuation.

“ENPH is executing flawlessly as it adds new component suppliers to eliminate supply chain bottlenecks and diversifies its manufacturing geographically. At the same time, the long-delayed iQ8 is shipping. The iQ8 enables solar power to provide electricity to homes without the grid or battery storage. ENPH is also enhancing the capability of its storage products significantly expanding their utility,” Richard commented in a note.

Shares of Enphase are now up 22% YTD.

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