Enphase Energy stock price forecast: The bullish case for ENPH

July 28, 2023 08:44 AM PDT | By Invezz

Enphase Energy stock price forecast: The bullish case for ENPH — Image source: Invezz

Solar energy demand falling

Enphase Energy is an American company in the solar energy industry. The company focuses on micro-inverters, battery energy storage, and EV charging stations. Therefore, with the US transitioning to clean energy, demand for Enphase Energy products has been rising.

Enphase published weak financial results on Thursday. In a statement, the firm said that its revenue rose by 34.12% year-on-year to over $711 million. That revenue was about $14.8 million short of what analysts were expecting.

This growth happened as the company sold about 5.2 million microinverters and 82.3 megawatt of batteries. Its free cash flow came in at over $225 million as the gross margin rose to 46%. Most of this revenue was in the United States followed by Europe.

Watch here: https://www.youtube.com/embed/cXhANgNJaIE?feature=oembed

Enphase Energy believes that its business will slow down modestly in the third quarter. Its revenue will come in between $550 million to $600 million. Its gross margin is expected to come in at between 41% and 44%. Most importantly, Enphase Energy announced plans to repurchase shares worth $1 billion.

Despite the decline, I believe that Enphase is a good company to buy. First, demand for solar energy will continue growing in the next few years. Its revenue has grown from over $316 million in 2018 to over $2.6 billion in the TTM. It has also moved from an $11 million loss to a $492 million profit. This growth will likely continue in the foreseeable future.

Second, Enphase has a strong balance sheet, with over $1.77 billion in cash and just $1.2 billion in long-term debt. Further, the company has a commanding lead in the US as it seeks to move hasten its global expansion. And finally, the company is actively buying the dip of the stock.

Enphase stock price forecast

Enphase Energy chart by TradingView

The daily chart shows that the ENPH stock price has been in a strong bearish trend in the past few months. It made a bearish breakdown after the financial results on Thursday. As it dropped, the stock moved below the ascending channel shown in black. It has moved below the 50-day and 25-day moving averages (MA).

Therefore, I believe that the stock has more downside in the coming days as investors target the key support at $113.16, the lowest level in January. In the long term, however, the shares will bounce back as the company’s growth and profitability continues.

The post Enphase Energy stock price forecast: The bullish case for ENPH appeared first on Invezz.

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media LLC (Kalkine Media, we or us) and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures/music displayed/used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it, as necessary.