Why Enphase Energy (ENPH) Stock Is Gaining Today

NEW YORK (TheStreet) -- Enphase Energy (ENPH) shares are up 0.8% to $16.96 on Friday after analysts at Canaccord Genuity (CCORF) raised the company's price target to $20 from $12, while reiterating its "buy" rating on the stock. 

Canaccord analysts are bullish on the U.S. solar market and see signs of a strong housing market as being good for Enphase Energy.

"After recently speaking with a host of U.S. solar installers, financiers and suppliers we come away even more confident in the strength of the U.S. solar market, especially the residential sector," said the firm. "We reiterate our BUY rating on ENPH as we continue to believe in the growing trend of intelligent inverters, the strength in the U..S residential market and Enphase's dominant share in the microinverter space."

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Separately, TheStreet Ratings team rates ENPHASE ENERGY INC as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ENPHASE ENERGY INC (ENPH) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 6.5%. Since the same quarter one year prior, revenues rose by 41.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • ENPH's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, ENPH has a quick ratio of 1.62, which demonstrates the ability of the company to cover short-term liquidity needs.
  • 35.15% is the gross profit margin for ENPHASE ENERGY INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -3.69% is in-line with the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, ENPHASE ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • You can view the full analysis from the report here: ENPH Ratings Report

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