Enphase Energy, Inc. (ENPH) has navigated a bumpy road over the past year. However, despite the negative impact of the coronavirus pandemic on business, this energy technology company had a WhaleWisdom Heatmap ranking of 34 and has shown considerable growth. Enphase significantly outperformed the S&P 500, rising by approximately 515.7% as of April 23, 2021, compared to the S&P’s gain of about 28.0% since the start of 2020.
Enphase designs and manufactures software-driven home energy solutions, delivering semiconductor-based microinverter technology globally for the solar industry with a platform for intelligent energy management. The company’s solar energy generation and storage solutions connect through the intelligent platform. Enphase saw a slowdown in solar installation during the pandemic but has more recently regained market share as solar power popularity continues to rise.
Mixed Results from Hedge Funds and Institutions
Hedge funds are selling, in contrast to institutions. Looking at fourth-quarter activity by the top hedge funds, the aggregate 13F shares held decreased to about 14.2 million from 21.0 million, a decrease of approximately 32.3%. Of the hedge funds, 44 created new positions, 35 added to an existing holding, 17 exited, and 46 reduced their stakes. In contrast to hedge funds, institutions increased their aggregate holdings by about 0.5% to approximately 94.0 million from 93.5 million.
Impressive Multi-Year Estimates
Analysts anticipate that earnings per share will continue to rise from 2021 through to 2023, with year-over-year growth ranging from 29.8% to 49.3%. These significant year-over-year estimated increases for earnings could bring them to $3.62 per share in 2023, up from an estimated $2.05 for 2021. Revenue predictions are also quite promising, with revenue estimated to grow to approximately $2.2 billion in 2023, up from $1.3 billion in 2021.
Analysts Take Varied Stances
Despite impressive growth and optimistic estimates for the next few years, not all analysts raised price targets. JPMorgan Chase & Co. analyst Mark Strouse sees a buying opportunity for the stock. Strouse gave Enphase an Overweight rating as U.S. President Biden’s infrastructure plan would be favorable for the energy stock in addition to benefits of an investment tax credit extension for solar power and storage. James West of Evercore ISI gave the stock an Outperform rating and $184 price target, noting the company’s dominant position in the U.S. residential microinverter market. Barclays Investment Bank analyst Moses Sulton lowered the firm’s price target on Enphase to $214 from $256, maintaining an Overweight rating.
After historic highs, energy stocks like Enphase may have undergone market corrections, but the company’s upward momentum continues. Enphase’s U.S. presence stands to benefit from President Biden’s climate-based goals. While some analysts may be cautiously optimistic, there is long-term promise in the solar energy market.