Do the Fundamentals Support Enphase Energy Upwards Movement?

Enphase Energy logged a 5.94% change during today's morning session, and is now trading at a price of $210.78 per share. The S&P 500 index moved -0.09% and the Nasdaq posted a -0.04% change.

Enphase Energy shares moved 26.44% over the last 52 weeks, with a high of $339.92 and a low of $128.67. During this time, the stock outperformed the S&P 500 index by 33.96%. As of January 2022, the company's 50-day average price is $240.0. Enphase Energy is an American energy technology company headquartered in Fremont, California. Enphase designs and manufactures software-driven home energy solutions that span solar generation, home energy storage and web-based monitoring and control. The large-cap Consumer Cyclical company is based in Fremont, CA.

Exceptional EPS Growth with a Highly Leveraged Balance Sheet:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $624 $774 $1,382 $2,331
Revenue Growth n/a 24.04% 78.46% 68.65%
Gross Margins 35.44% 44.68% 40.12% 41.81%
Gross Margins Growth n/a 26.07% -10.21% 4.21%
Operating Margins 16.45% 24.07% 15.62% 19.23%
Operating Margins Growth n/a 46.32% -35.11% 23.11%
Earnings Per Share $1.31 $1.04 $1.09 $2.91
EPS Growth n/a -20.61% 4.81% 166.97%
Free Cash Flow (MM) $124 $196 $300 $698
FCF Growth n/a 57.53% 52.99% 133.16%
Capital Expenditures (MM) $15 $21 $53 $46
Net Debt / EBITDA -1.34 -0.12 5.74 1.87

Enphase Energy Is Overpriced:

Compared to the Consumer Cyclical sector's average of 22.33, Enphase Energy has a trailing twelve month P/E ratio of 73.96 and, according to its EPS guidance of 7.34, an expected P/E ratio of None.

Enphase Energy's P/B ratio is 74.15 compared to its sector average of 3.12. The company is likely overvalued in terms of its net asset value. The company's shares are currently trading 1516.41% above their fair value as expressed by Benjamin Graham's formula:

√(22.5 * 5-year average EPS * book value per share) = √(22.5 * 1.25 * 6.05) = $13.04

Most of the Market Indicators on Enphase Energy Are Negative:

32 analysts are following Enphase Energy and have set target prices ranging from $205.0 to $365.0 per share. On average, they have given the company a rating of buy. At the current price of $210.78, ENPH is trading -29.67% away from its average analyst target price of $299.69 per share, implying an analyst consensus of strong upside potential for the stock.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.