“We believe [Enphase] stands to benefit from a number of long-term tailwinds in the solar market, including:
“(1) the continued expansion of the residential and commercial solar market,
"(2) higher battery attachment rates over time, and
"(3) the decentralization of energy production,” they said.
“ENPH has two key competitive advantages that should support growth visibility: regulation NEC 2017, which creates barriers to entry in the U.S. market, and product innovation and software technology.”
That innovation and technology “provide customers with an intelligent home energy management system,” Blum and Satish said.
“[They] enable the various components of the solar system to interface seamlessly, provide product reliability, and allow the customer to monitor and optimize their system to their specifications through easy-to-use apps.”
Enphase recently traded at $254.33, off 2.6%. Blum and Satish have a price target of $313 on the Fremont, Calif., company.
The duo like SolarEdge, Herzliya, Israel, for the same reasons. It recently traded at $350.50, off 0.9%. The analysts have a price target of $441.
When it comes to First Solar, “it is the largest solar cell module manufacturer in the Western Hemisphere and is a top 10 solar manufacturer globally, with a differentiated cadmium telluride cell technology,” Blum and Satish said. “Most of the solar industry utilizes crystalline silicon.”
"However, we expect continued [average selling prices] and margin pressure, due to the highly competitive nature of the solar panel market," the analysts said. And that "could limit long-term Ebitda and earnings upside."
The stock recently traded at $106.49, off 1.5%. The analysts have a price target of $115 on the Tempe, Ariz., company.