The M190's were casing problems from day one....which is why ENPH's stock tanked to below two the first time (end of 2012).. The belief then was warranty issues/customer complaints would drive them out of business (at the time warranty obligations were constantly being adjusted upward)..
The M215 and M250"s changed all that.
Even though inverter sales are still increasing dramatically (up from 859K to 950K just last quarter) current warranty obligations are decreasing (7,2M to 6.6M last quarter)....meaning they are even more reliable then ENPH initially thought.
As a side note SEDG's current warranty obligations jumped up about the same as their sales did (around 12%).
As another side note....over the last few years ENPH has had competition in the micro space.
So how did that work out?
The obliterated it; gaining a 98% market share of the micro inverter market (causing SolarBridge to give in to a buyout offer of 105M....about 20M more than ENPH's current market cap).
ENPH never viewed SEDG as a competitor until the last few months (when they got their lunch handed to them).
Well, now they do view them as competition.
So let's see how they respond to this new challenge.
After all, the first rule of fixing a problem is realizing you have one.
Before SCTY came along SEDG had revenues of around 130M....2014.
They were even a twinkle in ENPH's eye.
Now they're a cancer that may destroy the company.
Meaning...markets change rapidly.
Last quarter SEDG prices per watt dropped to .23 cents....half of the price per watt of ENPH's micros.
Yet sales of micro inverters still increased from 859K to 950K.
So I wouldn't call ENPH's products obsolete....just overpriced for their value reference SEDG.
ENPH states they've now lowered prices 20% and will an additional 20% this coming year.
ENPH has over 100M in working capital available to them and a new line of products they've spent more than their current market cap developing.....they may go out of business but it won't be for years.
SEDG should make an offer to buy ENPH. If they can get it for anywhere around 200M (in stock) it's be a win win for both companies.
SEDG would double within a few months (earnings and revenue would soar) making both shareholders a winner.
If they don't look for a price war on the inverter front. SEDG has the IPO cash but ENPH has it's new product line (storage) to fund it. The war won't end for years....so even if SEDG wins it loses.
"The real change will come when panels have an MPPT chip shipping in the J-Box, or even better, cell-string level MPPT coming off the manufacturing line. Then all inverters will be like the stripped down versions that SEDG ships and they REALLY become a cheap commodity at that point."
Maybe, but I doubt it.
You'd end up with your entire system dependent on a "cheap commodity"...central inverter.
You'd still have all the disadvantages that gave birth to micro inverters in the first place.
I see that as going backwards....not forwards
SEDG also stated in their last C.C. the cheap Chinese inverters sales in Australia were declining rapidly as the market figured out they weren't reliable.
Once you have a micro inverter that will outlast solar panels and be more reliable (ENPH already there) that is cost effective (not there) that will be the end game.
The only question is at this point is can ENPH pull it off cost wise?
The CEO of SEDG already stated his opinion....never has happened and so it never will.
As for ENPH...I think at this point in their valuation (85M market cap) they'd probably double overnight if they announced they were cutting expenses 50% by eliminating mcro inverters and concentrating on the multi billion dollar upcoming storage market.
The reason SCTY and SUNE tanked is their access to capital, which used to be unlimited, is not anymore.
Their business models depend on additional funding as 70% of their sales are through leasing....an initial loss on every order.
SCTY responded by cutting back on sales growth.....in half. That's a big hit on SEDG since nearly 1/3 of their revenue comes from SCTY. The bigger issue what will happen if to the leasing program if the ITC credit goes away?
SUNE slowed sales but also is trying to other tactics saying they will be cash flow positive by next year. That gave the stock an initial bump but earnings the other day made it clear that was not going to happen. They also have the same leasing issues, as does anyone that has a majority of the business in that area.
" I always present enphase to my customers but offer SE as an alternative if somebody has been spooked on ENPH by one of my anti-enph competitors."
You're not the only one thinking like that.
SCTY spent 120M on marketing this year all anti-enph.
SEDG benefited greatly from that...as they did over 80M in sales 2015 just from SCTY (25% of total sales).
That anti -enph theme I think is also why VIviant added SEDG's products to their portfolio.
Resulting in Viviant accounting for 13% of SEDG's sales last quarter (Q1 2016).
I guess their thinking was why fight 120M in marketing?
SEDG grew international sales (no SCTY connection) around 30% last year while over all sales
jump from 133M to 325M (about 5X that rate).
Whomever got SEGE's foot in the door at SCTY should be given a big raise...and is probably single handily
responsible for the destruction of ENPH (well, that and a lousy CEO/CFO).
The best thing that could happen to ENPH at this point is for SCTY to implode...or make a deal with them.
What times did you pull those numbers?
For Oct they were averaging 316 installs per day.
July = 298, August = 280, September = 310.
Which includes only public systems.
Total inverters sold for Q3 was 950K...up from 859K Q2.
Selling inverters has never been their problem....until now.
Now it's a price issue.
The BOD controls the CEO. The shareholders vote for the BOD.
The BOD is responsible to the shareholders.
The vote for the BOD is usually done during annual meetings.
Usually it would take new members to boot a long term CEO.
As a shareholder you could nominate anyone you like.
If they get elected them they could push to fire the CEO.
Year over year SEDG just grew over 70%....after growing 140% the year before.
They just guided for a 3% sequential gain (115M to 119M) next quarter.
What does that tell you?
Clearly it is not ENPH limiting their growth.
So who is it?
It's logic like that that shows why SCON has survived over a decade with it's share price down 99%.
I give their CEO credit.
I know of no other company that has pulled this off for so long.
Can't argue with any of those points and the share price being cut in half since the C.C. just reinforces that is what the market thinks also.
But they do plan to layout a road map for future success...but not until Nov 17th.
Didn't understand that move.
Kind of gave the impression that didn't realize just how much hurt their shareholders were about to experience.
The only good news is ENPH has been left for dead before with the same team. They pulled a rabbit out of their hat then so I don't think it's impossible now.
But yea, they not only misread the market trends over the last 6 months they've also misread the investor trends over the last 6 days.
ENPH's margins have averaged 30-32% forever....until guidance of 25% this quarter.
Our beloved CFO also stated this quarter would be "abnormal"....while the blow out inventory and catch up on their bloated A/R.
So 35-40% is not all the crazy IMO....especially since we have no clue what the margins on the batteries will be yet.
As for back up batteries...Utilities have always driven solar, good or bad, why would batteries be any different?
I saw the CEO of a major utility the other day predicted within 4 years there will be no more major power plants built in the US.
The only way for that to happen is storage to become a huge industry.
Pretty clear Hawaii is going to be the test case for the US markets.
ENPH did announce pricing, down under anyway, a few weeks back.
""Enphase has announced pricing for the battery at AUD$1,150 (US$817) per kilowatt hour for volume purchases by direct customers in the Australian market, with a margin to be applied by partners."
"Every other solution on the market that we know of is essentially just a battery," Enphase Energy’s Asia-Pacific managing director, Nathan Dunn, told Gizmag. "This means you’d have to add additional components to convert the power supply to AC, and additional software to monitor the battery usage. All of that requires a lot of complex engineering. We’re offering a complete solution that can be essentially a plug and play exercise."
Also...didn't realize you could use ENPH's battery without a solar hookup....so much for the no back up logic.
So you can just hook some up to your solar panels and then some on the side just for back up?
That creates in entirely different market for ENPH...like the one in TX.
I had no idea a market like that even existed.
I can't remember off the top of my head, but for 2014 SEDG did around 19% of their total sales with SCTY....up to 25% for 2015 and probably over 30% last quarter (another reason they are going to get crushed if the ITC credit is not expanded and leases evaporate....70% of SCTY's installs are leases).
Remember SEDG's fiscal and calender years don't match up....they just reported Q1 2016.
So they were selling plenty of Optimizers 1.5 years ago.
You're looking at long term warranty obligations....not current.
ENPH had issues with their 1st generation and they are still paying for it.
I messed up though. I was looking at press releases instead of 10Q's which broke down numbers with
different terms. I was comparing ENPH's current with SEDG's long term.
But it really doesn't change the picture all that much.
Last three quarters ENPH current obligations are actually declining.
From 7.6M to 7.2M to 6.6M.
SEDG's are increasing.
From 7.6M to 9.4M to 10.8M.
Never mind the fact ENPH's warranties are longer and now cover energy lost also.
But still, the number is 60% and increasing rapidly (probably 100% next quarter if the trend continues) instead of 4X .
It's still clear who's products are more reliable.
But again, the question is how much that is worth in the market place?
Thanks for pointing my error out.
ENPH rose from the dead twice in the last few years.
Once when their products were perceived as junk.
The second when their annual sales dropped from 50% to 10%.
So does history repeat itself or are they really dead this time?
It's what makes a market interesting.
"Regardless, we can all find horror stories for every product out there given that there are 10's of thousands of installations, so a single story really does not make a point. I can give you lots of horror stories on Enphase too."
That's why you look at "warranty obligations" on a company's balance sheet.
Everyone says their products are the greatest....but they usually don't cheat on their accounting (usually).
The last time ENPH tanked to 2 wasn't because of SEDG eating market share, it was because the rumor was their 1st generation micro inverters were failing at an alarming rate at it was confirmed when ENPH started adjusting their warranty obligations upward.
Currently while sales revenue is similar SEDG's warranty obligations are 4X ENPH's.
I think it's pretty clear which is the more reliable product.
It's also clear when SEDG"s inverters do fail they cause the entire string to fail whereas with micros it's just one panel....and easy to locate.
It's also why ENPH now not only warranties their micros for 25 years but guarantees 100% of the power production during that time (how high would SEDG's warranty obligations jump if they matched that?).
But again, that's just one more advantage ENPH has and why they have been able to charge a premium.
I think prior to last quarter it was around 30% but last quarter it jumped to nearly 50% (around .23 vs .47 per watt)
Clearly that was the tipping point for customers.
I think at this point no one is going to accuse ENPH's management of being smart.
At this point it's more like just how dumb are they?
It took SEDG 9 months of hitting them over the head with a hammer to understand the market had changed.
So did that hammer wake them up or cause brain damage?
I've been pushing SEDG to buy ENPH with 200M worth of stock.
That would equate to about 4 dollars a share.
But SEDG's stock would double shortly after the deal closes since the competition would be gone in an instant.
Meaning we'd end up with 8 dollars a share in stronger combined company.
But then what do I know...I still think the future of inverters is micros.
It's clear micros are superior to any kind of string system.
The CEO of SEDG made that clear with his comments last quarter.
The question is how much the market will pay for this?
Pretty clear a 50% premium is not going to work anymore.
So what is the new number?
It will be interesting to see how ENPH maps out their future cost plans now that they've come out of their
fat, dumb and lazy slumber.
So we'll soon find out if SEDG just awakened a sleeping giant or an old fat guy....who'll shout out a few threats and then go right back to sleep.
Fear vs Greed.
Fear always wins.
Why is SEDG not soaring on their quarterly results...especially since it's being touted by every analysts?
Because markets look forward, not backwards and when it's a choice between fear and greed...fear always wins.
In the past ENPH's products sold for a 50% premium to SEDG's....making ENPH's executives fat, dumb and happy.
At that number SEDG's prospered...taking market share and getting in the door with SCTY.
ENPH just said they lowered their prices 20% and will lower it another 20% next year.
Meaning they will be cost competitive with SEDG.
They just announced deals with two major solar manufacturers to integrate micro inverters to produce AC
solar panels....worst case scenario is they become the market standard/meaning no more SEDG.
Can they stay in business long term at this level?
Got me...but they over 100M in working capital to give it a shot.
Why is ENPH not going up if SEDG is going down?
Because while the markets fear ENPH's rapid price reductions will hurt SEDG they are not greedy enough to buy ENPH....even with a market cap 1/8th of SEDG.
Fear wins over Greed...every time.
As for ENPH's cash....they have over 100M in working capital. Regardless of current conditions they'll be around for a long time...which is why SEDG should make an offer to buy them (in which case SEDG's stock price would double in a month).
As for TSLA and SEDG...any inverter will work with TSLA's PowerWall. There is was never an exclusive contract signed. If ENPH was smart they'd figure out how to integrate an S inverter on it...making an additional central inverter unnecessary.