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joebigbuck 378 posts  |  Last Activity: 11 hours ago Member since: Jan 22, 1999
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  • joebigbuck joebigbuck Nov 4, 2015 3:31 PM Flag

    Where are you getting that number from? Is it the "total installations" on their home page or somewhere deeper in ?

    I think that is really important now.

    Nahi's strategy is to lower prices to win market share....they sold 950K microinverters last quarter....up 90K sequentially.

    If the numbers jump dramatically it will tell it's working.

    As for the revenue....I think they guided very conservatively (62M to 70M).

    Think about it. They just sold 950K micro inverters last quarter....up 90K sequentially.

    So say they just jump to 1M this quarter....Nahi stated the quarter would be "soft" but those installs do not bear that out.

    So those 1M are going to retail for 62 to 70 bucks?

    It should be quite the meeting on Nov 17th when Nahi lays out his cost reduction plan. If it's to immediately drop prices to 70 dollars retail on the M215's that is same price as a DC Optimizer.

    Nahi stated this quarter would be an "abnormal one" . I wish he would have just taken the time to lay out his strategic plan instead of pushing it off again.

    What's the secret?

  • joebigbuck by joebigbuck Nov 4, 2015 12:44 PM Flag

    It's clear SEDG is the big winner when they enjoy a 50% price advantage.....

    "In the quarter that ended in June, Enphase sold inverters for an average of about 52 cents a watt, compared to SolarEdge’s average price of about 35 cents a watt, based on the amount of megawatts shipped and total sales, said Michael Morosi, an analyst at Avondale Partners LLC in Nashville, Tennessee."

    ...but what will happen to the market now that ENPH has gone all in on pricing (tossing margins out the window)?

    What's interesting is while solar panel prices have pretty much stabilized.....

    "Seen prices for solar panels lately? Sure, they’ve plunged two-thirds in the past five years, but the rate of decline has leveled off -- in the past 18 months they’re down just 5.1 percent."

    ...inverter prices have tanked 4X that amount (25% over the last 18 months).

    I think a lot of credit for that can go to SEDG. They've disrupted the market...but to what end?

    In the past ENPH has always held firm on dropping prices in the 10% range, which matched their cost reduction (margins holding steady).

    In the meantime they continued to hold their premium pricing because of the value they brought to the market.

    I the past it was predictable what that premium was, but SEDG"s emergence brought that world to an end.

    .ENPH tried to hold steady all the while SEDG was gaining market share...proving the premium of the past no longer existed.

    Faced with this new reality and not really sure what that new premium should be ENPH decided to find out.

    And that is where we are today.

    The inverter market is over 7B and growing. Between the two of them they own about 10% of that....meaning there is plenty of room for both of them to be successful.

    But ENPH has to find out what it's new "premium" to the market is.

    Clearly it's not 50%.

  • Reply to

    $3 million in stock-based compensation expenses

    by trademan1 Nov 4, 2015 9:31 AM
    joebigbuck joebigbuck Nov 4, 2015 12:21 PM Flag

    If being successful gets you a 100M market cap there will be no new competition....SolarBridge needed 100M in venture capital just to get started and most venture capitalists expect 500% plus return on a successful investment (most fail).

    Give SEDG credit, they pulled their IPO off with perfect timing....before the ITC credit expired and before starting a price war.

  • Reply to

    The falicy in Paul's strategic plan

    by johnnie_beans Nov 3, 2015 8:21 PM
    joebigbuck joebigbuck Nov 3, 2015 10:00 PM Flag

    "In the quarter that ended in June, Enphase sold inverters for an average of about 52 cents a watt, compared to SolarEdge’s average price of about 35 cents a watt, based on the amount of megawatts shipped and total sales, said Michael Morosi, an analyst at Avondale Partners LLC in Nashville, Tennessee."

    Sales for Q2 were 195 megawatts vs 219 for Q3.

    So let's call it a 10% increase.

    So that would push prices down to the 47 cents a watt range for Q3...just ended.

    Now lets say the wattage is flat for Q4 (odds are it will be up another 10% or so) with revenue down 30%.

    That would push the cost per watt to around .33 cents.

    More than competitive and even if SEDG drops prices 10% this year it's still a push.

    With a 50% price advantage prices/revenue have been even between the two the last couple quarters.

    So how will the loss of a 50% price advantage effect the market balance?

  • Reply to

    The falicy in Paul's strategic plan

    by johnnie_beans Nov 3, 2015 8:21 PM
    joebigbuck joebigbuck Nov 3, 2015 8:47 PM Flag

    SEDG"s CEO stated bluntly since micros have never been cheaper than central inverters in the past they would never be in the future. Since ENPH has never played the pricing game (highest margins in the industry) I just think he thought they never would. He envisioned prices dropping 8-10% next year....not 35% in one quarter.

    Today's news kind of blows that theory all to heck.

    Clearly to Nahi his strategy is already successful as he stated there were some major deals in the works he's yet to announce.

    I wonder if Nahi spoke to SCTY and asked them what it would take to get them to bite? 4 of the top 5 players already sell ENPH....but SCTY is the 500 lb gorilla that has been driving SEDG's success.

  • Reply to

    My take on strategic decision.....

    by joebigbuck Nov 3, 2015 6:25 PM
    joebigbuck joebigbuck Nov 3, 2015 7:19 PM Flag

    That would be fraud.

    I seriously doubt they are playing that game. In addition to being illegal, it just doesn't seem like Nahi's style. He didn't seem all that concerned that last time ENPH traded in the two's and he doesn't seem all that concerned now...if you ask me. I just think he's super optimistic on the future of ENPH, has a vision, and just sees this as just another temporary obstacle.

    As for emotional ties...thanks for advice. I just see it different.

    I love my if I'm going to give it/invest in someone/company I have to love them more....otherwise they are not getting my money (which I love).

    Using the same principle I give a lot to charity (and to my wife and kids..funny rude). I love my money, but I love them more.

    "Revenue Recognition

    We generate revenue from sales of our microinverter systems, which include microinverter units and related accessories, an Envoy communications gateway device, and an Enlighten web-based monitoring service, to distributors, large installers, OEMs and strategic partners. Enlighten service revenue represented less than 1% of the total revenues for all periods presented.

    Revenues from sales of microinverters and related accessories, and communication gateways are recognized when: (i) persuasive evidence of an arrangement exists; (ii) delivery of the products has occurred in accordance with the terms of the sales agreement and title AND risk of loss have passed to the customer; (iii) the sale price is fixed or determinable; and (iv) collection is reasonably assured. Provisions for rebates, sales incentives, and discounts to customers are accounted for as reductions in revenue in the same period the related sales are recorded."

    That said....when you see major strategic moves like Nahi is currently doing it's usually because they've made some serious wrong assumptions in the past. No success story runs in a straight line (not AAPL's, not anyone's), but Nahi seems overly adverse to straight lines.

  • Reply to

    So much for my numbers

    by twoplanker110 Nov 3, 2015 6:22 PM
    joebigbuck joebigbuck Nov 3, 2015 6:42 PM Flag

    The good news is ENPH margins and profits were high enough that they can cut prices 35% (102M vs 66M guidance with flat inverter sales) and still be cash flow positive.

    Clearly they could have let this play out for a few quarters but I guess they decided to hit back hard at the competition.

    And not only did they guide down 35% in pricing they guided down another 20% next year.

    So much for SEDG's assumption of 8-10% 2016 price erosion.

    It's possible the 35% cut is only for one blow out a couple weeks worth of inventory.

    That would set up for a pretty solid Q1....the first that will include battery sales.

  • Pretty clear to me how this played out....I'm always good at figuring out too late.

    ENPH did not channel stuff and SEDG did not force their hand.

    Why the major price reduction then?

    Prices dropped dramatically last quarter making it nearly 18% year over year.....and ENPH was able to keep pace with their 30% plus margins because they were able to cut cost 16%.

    So sales slowed because SEDG ate their lunch, right?

    Doubtful, since total inverters sales jumped from 879K last quarter to 950K this quarter (10% sequentially). That's a pretty good jump and far above what analysts were expecting.

    So why the major price reduction now? Why did inventory jump and with it A/R? Why was the analyst surprised when Nahi said even in 2016 generation 5 inverters would make up only 20% of their sales? Why not more if they were blowing out the old inventory with this huge price reduction (35%)?

    My take is one of the ways ENPH was able to lower costs 16% this year (nearly twice the rate of SEDG) was they cut a deal with their supplier (Flextronics). But with the price reduction came guaranteed volume levels.

    Which is why the inventory stayed high through out the year. Clearly whatever they arranged ENPH was living on the edge, as inventory was staying abnormally high even as sales increased (resulting in higher A/R).

    I suspect it came to a point where ENPH was either going to have to keep accepting a growing inventory level or cut prices to generate a high enough sales level to not only cover when they had guaranteed but blow out 2 weeks worth of extra inventory they were holding (normal inventory is around 21M and they're now up to 36M and increasing).

    Only way to do that is cut pricing to generate increased sales.

    It's having the desired effect. Two major players signed deals to integrate ENPH's micro inverters into their panels.

    I think for competitive reason Nahi didn't want to announce this to the world but his prior deal with Flextronics forced his hand.

  • joebigbuck by joebigbuck Nov 3, 2015 4:20 PM Flag

    Q3 was's the guidance that is a killer (and I thought SEDG's would be bad).

    Pretty clear Nahi has decided to go all in on pricing.

    Great, now we have a price war.

    Wonder why he decided to do this all at once? No messing around with him.

    Guess he shifted to plan B.

    Should have gotten a head's up from those M250 prices we saw a couple weeks back....I guess I'm just
    too dumb to read between the lines.

    The good news is ENPH has such a low market cap there simply isn't a long way to fall.

    The only plan now is to wait for the sales to come back with the storage sales.

    Should be an interesting C.C.

  • Reply to

    Inverter wars

    by johnnie_beans Nov 3, 2015 12:53 PM
    joebigbuck joebigbuck Nov 3, 2015 2:39 PM Flag

    "Enphase does not have a product that works with Sunpower's panels so there are no sales to displace."

    My thinking was that if SunPower is successful selling those integrated panels others will follow.

    ENPH has already lined up two major players to integrate with, so it's pretty clear SunPower is not alone in their thinking (integrated panels are the future).

    It would be a major plus for ENPH if the market went in that direction since they own about 98% of the micro inverter market.

    And Beans....30% makes for a pretty heavy wagon.

    SEDG grew about 20% last year internationally yet 140% in the US.

    Wonder why that was?

    ENPH is growing far faster internationally (over 100%) vs the US (flat).

    Wonder why that is?

    Hint.....SCTY does over 30% of all installs in the US with a growth rate of over 100% in prior years.

  • Reply to

    Inverter wars

    by johnnie_beans Nov 3, 2015 12:53 PM
    joebigbuck joebigbuck Nov 3, 2015 1:15 PM Flag

    The problem is, and the article did not point out, SEDG hitched their wagon to SCTY (and is now paying the price for that hitch) and has grown rapidly this year because of it.

    ENPH hasn't hitched to anyone and instead focused their resources on growing internationally and developing an entirely new line of future revenue (to avoid a major hit if the ITC credit goes away is my guess).

    Shah gives them zero credit for their growth strategy, instead focusing on his belief ENPH will be forced to cut prices /margins in order to compete with SEDG.

    He'll be wrong, just like he always is (on his 3rd job in the last few years), but the question is how wrong?

  • joebigbuck joebigbuck Nov 3, 2015 12:48 PM Flag

    What part of "you have to do it in court" wasn't I clear about?

  • joebigbuck joebigbuck Nov 3, 2015 11:37 AM Flag

    "All patents are not enforceable."

    You making up stuff again?

    A patent is as strong as the resources behind it. You can't call the police and expect them to protect your patent.

    You have to do it in court.

    So, yea. All patents are enforceable or they wouldn't be a patent.

    The penalties for violating someones patent are harsh...but so is the road to recovery.

    MITK, a small company I follow tried to take on USAA a few years back. The fight cratered their share price by 70% and cost them large sums of money over nearly a 3 year period. In the end the resources of USAA just overwhelmed those of the smaller company and MITK lost the war.....4 years later they still trying to recover from that fight.

    Sometimes it just does not pay to take on the fight. If SunPower agreed to keep SolarBridge in house and not compete straight up with ENPH then that's a win by my thinking. ENPH is already hooking up with other panel manufactures that will produce a superior product anyway (ENPH destroyed SolarBridge as a competitor).

    SunPower marketing those panels is only good news for ENPH. If they are successful others will follow...and who do you think they'll look to for their micro inverters?

    Now for SEDG....if AC panels are the future they are DOA.

    As for batteries....ENPH's are bidirectional. They will work with any system.

  • Reply to

    If it can break through 18.50...

    by kingsalt Nov 2, 2015 1:51 PM
    joebigbuck joebigbuck Nov 3, 2015 12:24 AM Flag

    Nobody is throwing SEDG in the trash. They are still trading above their IPO price and have a market cap north of 700M.

    It's an interesting bet though. If they do guide above 110M (very possible) it should recover rapidly.

    I'd take a shot but at the moment all my gambling/daytrading money is on AVXL. They should run until at least Friday....then will explode or crash on Monday.

  • joebigbuck joebigbuck Nov 2, 2015 3:25 PM Flag

    This is how that question played out on the C.C. Hopefully someone will ask it again and mention Solarbridge instead of Enbridge.

    I'm kind of curious also. It might just be they didn't want to spend the money to get involved in a lawsuit with SunPower, who is a customer of their's. Would be bad for business and the earnings statement. SunPower might also have promised to not to put the micro inverters into the open market but just keep them internal.

    As a side note, SunPower (about a 4B company) spends 20M on R&D while ENPH (a 150M company) spends 13M per quarter on average.

    I know of no viable company, other than ENPH, that spends 1/3 of it's market cap on R&D.

    Peter Geis, - Analyst [64]


    Hello. Yes. I missed the first part of the call. Maybe you addressed this earlier, but why was the patent infringement lawsuit dropped versus Enbridge?


    Paul Nahi, Enphase Energy, Inc - President, CEO [65]


    I'm sorry. I didn't catch that question?


    Peter Geis, - Analyst [66]


    You may have addressed this earlier. Why was the patent lawsuit dropped versus Enbridge?


    Paul Nahi, Enphase Energy, Inc - President, CEO [67]


    I don't know who Enbridge is so I think you may have -- you may have the wrong company.


    Peter Geis, - Analyst [68]



  • joebigbuck joebigbuck Nov 2, 2015 1:44 PM Flag

    How do you value ENPH? It's never been consistently profitable, so a P/E number is worthless.

    It trades on the perception of future profits.

    Sometimes the markets think it will be rolling in the dough and sometimes they think it's going to drown in debt.

    The only thing I look at is the company positioning themselves for the future or are they living the edge of survival as Shah and the current share price is telling us?

    But you are right, if they needed cash. At that point the share price would be important...if they went the equity route.

    As for now....ENPH has over 80M in working capital and a HUGE R&D budget they could cut back on if they really wanted to. I don't see cash or working capital as issue now or in the future.

    As for the ITC of the good things about them entering the storage market is most of the initial sales will occur overseas. ENPH currently does about 20% of their business outside the US and my guess is that will jump to over 50% by the end of next year. That will be a pretty good buffer if the credit does go away. The other bonus is SCTY and it's leases will also go away. Since they don't use ENPH's products and that is over 20% of the entire market ENPH might actually get a bump up. Remember, SCTY is spending a fortune on advertising (which is why their cost per watt just jumped 30%) and that entire push works against ENPH (SCTY does not use micro inverters and it's sales people are told to lie and state it's because they are less reliable....we know that's not true because ENPH's warranty is twice as long as string inverters and it's warranty obligations are 25% of competitors).

  • joebigbuck joebigbuck Nov 2, 2015 11:43 AM Flag

    For better or worse SEDG has tied their wagon to SCTY. In the beginning it was the greatest move ever, as international sales for SEDG were only growing int the 20% range while US sales (because of SCTY) exploded up over 100%.

    The timing of SEDG's IPO was perfect, as it hit before SCTY decided to scale back growth.

    SCTY claims they are scaling back growth because they state they want to become profitable sooner, but the real reason is their costs have gotten completely out of control. Sure they've managed to get 30% of the US market, but the marketing costs have skyrocket.

    "SolarCity is now starting to focus on cost reductions and becoming cash flow positive by the end of 2016. The reason is that cost reductions on installations are being overshadowed by rapidly growing increases in sales costs. In Q3, sales costs per watt jumped 31% from a year ago, a figure that should be going down, not up. And even that expense didn't bring the kind of growth SolarCity was expecting."

    The other HUGE problem SCTY has is 70% of it's business comes from leasing, not purchasing. If the ITC credit does go away that market will disappear overnight. With a bloated costs structure and looming credit expiration they had no choice but to scale back.

    I think SEDG will survive just fine (that IPO cash ensured that), but it's growth prospects because of the wagon they tied themselves to will have to be scaled back.

    The stock price is just correcting to this new reality.

    As far as ENPH is concerned, in the US SCTY has seriously cut into their growth so it's demise is only good news. On the international front, where SCTY is not a player, ENPH is/has been growing much faster than SEDG.

  • Reply to

    New OCN Filing inc NRZ

    by hanakookie Nov 2, 2015 10:19 AM
    joebigbuck joebigbuck Nov 2, 2015 11:27 AM Flag

    Just more money for NRZ when rates finally do start moving up.

    This is from NRZ's last C.C.:

    "During the quarter, away from the HLSS acquisition, we also acquired or agreed to acquire $59 billion of legacy MSRs, again which is separate from the HLSS acquisition, further growing our MSR investments in the Company."

    "On page 4, I wanted to spend a minute as to why we're different -- why we think that we're different than other mortgage REIT's. Again, we own a very large portfolio of mortgage servicing rights, over $400 billion. MSRs are one of the few investments that should rise again in value as rates go higher, simply because prepayments will slow down, and you're going to have more cash flow for a longer period of time. Our mortgage servicing portfolio is something that you simply can't replicate in today's market."

  • Reply to

    A realistic view

    by bacon2bacon Oct 30, 2015 9:54 AM
    joebigbuck joebigbuck Nov 1, 2015 5:11 PM Flag

    I've already decided to continue to reinvest 100% of the dividend as long as this trades under 16.
    My thinking is by this time next year the dividend will be 50 cents a quarter...netting up 12% at 16.

    At that point I'd start looking around a little. Below that, as long as the company continues to perform, there is simply no reason not to reinvest.

  • joebigbuck joebigbuck Nov 1, 2015 4:59 PM Flag

    That's actually good news for ENPH and just more bad news for SEDG.

    It shows you where the future of solar panels is headed.

    Now there will be three main players (SunPower using SolarBridge....JinkoSolar using ENPH and SolarWorld using ENPH) integrating micro inverters into solar panels and odds are SCTY's new plant will do the same if they want to keep pace (more bad news for SEDG).

    "HILLSBORO, Ore., and PETALUMA, Calif., Sept. 14, 2015 – SolarWorld, the largest U.S. crystalline-silicon solar manufacturer for 40 years, and Enphase Energy Inc., a global energy technology company, have agreed to jointly develop a new generation of AC solar modules (ACM) for the worldwide market. The companies will collaborate on development, commercialization and marketing of an AC module that will integrate SolarWorld’s high-performance Sunmodule solar panels with Enphase’s leading microinverter technology."

    "SHANGHAI, Sept. 16, 2015 /PRNewswire/ -- JinkoSolar Holding Co., Ltd. ("JinkoSolar"), a global leader in the photovoltaic (PV) industry, today announced that its wholly owned subsidiary, JinkoSolar (U.S.) Inc., has entered into an agreement with Enphase Energy, Inc. ENPH, -2.70% a global energy technology company, to create a new PV bundle for U.S. commercial & industrial customers.

    The bundle, which consists of a JinkoSolar module and an Enphase® Microinverter System, will give clients access to add on the Enphase 100% System Availability Guarantee O&M service program from Enphase Energy Services (EES). JinkoSolar is the first module manufacturer to receive 100% coverage through EES' comprehensive O&M solution: customers are compensated for covered downtime of module or microinverter. The JinkoSolar-Enphase Commercial PV Bundle with EES is expected to maximize project revenue and protect customers' investment through EES' O&M services by providing higher system availability, reduced installation time, and easier system design."