I’m back in this for under ten bucks. It’s trading below this year’s revenues!
AT this market level, someone could easily buy the joint for twice current share value, fire Nahi and the whole R&D department and be ahead in less than two years.
Tesla’s making a big noise for SolarEdge but Enphase is not going away. Musk just made clear his battery will work with any solar system. Enphase loyalists will be able to choose between the Powerwall or the AC battery. SolarEdge will probably show good growth, but it’s still string tech.
In case anyone’s interested, the SEDG IPO had a post quiet period of 25 days.
That’s why the underwriters had to wait to pool their upgrades together and why SolarEdge had to wait to buy this press announcement. That’s the law.
The underwriters are likely still major shareholders in the SEDG IPO shares so they will want to continue distributing those as high as possible. The press game is the best way to do it.
Apparently SolarEdge has been selling to Vivint since last fall but were wise to wait until now to announce it. Making it sound like news was quite helpful to boost share price. I’d say all is going according to plan for the SEDG IPO. I can’t help but be impressed.
May 5th will still be an excellent window to seeing whether Enphase needs lease business for growth.
Sir Henry, once again, well said. It been happening since last fall but the post IPO quiet period prevented SEDG from buying press on it until now.
The 4/16 SA article nicely puts to shame all the claims by SEDG that their systems are cheaper. Completely shown false in the article comments.Worth a look.
SEDG is cheaper for SCTY and VSLR because they have to be, but they're equal at the distributor level. Speaks volumes.
So this validates what was speculated in the SA article. It's been happening for months but is now officially announced.
Enphase got underbid for VSLR. The question is will they care? The profit's better elsewhere but the market still wants to see growth. May 5th is the key.
Thanks Gip. I'm not sure if there's a hard and fast rule on when to warn. I seem to recall 25% or more below forecast gets a typical preconference warning.
The CFO had forcasted between $84 and $88 million thus the $86 million street number.
25% below that would be $65 million and 20% below would be about $69 million so I'm not sure a warning for $75 million would be expected.
That's not to say the market wouldn't respond, but keep in mind that if 6.5 million shares of short interest already holding it down doesn't constitute "negative expectations already built into current price", I don't know what would.
My 2 cents on short interest. I tend to agree with the 4-16 SA Article more or less.
If loss of tax incentive was the issue then it would have killed the whole solar sector. NG and crude did that to some degree, but look at TAN. It’s gone ballistic and doesn’t even deserve it as much as ENPH imho.
You just can’t overlook 6.5 million shares of short interest given the small float. It has Enphase shares pounded down real good and I think the SEDG IPO contributed but it sounds like cutting the chord with Vivint somewhat last fall with the VSLR IPO generated the most concern. The hedge market is expecting catastrophe.
The street wants $86 million in sales on (-0.08) earnings.
That’s up from $57 million sales and (-0.13) earnings a year ago. I admit that’s a pretty tall order given the situation. That’s also why I don’t expect much of a run into earnings.
If reducing sales through the Vivint business drops them below $75 million in sales for Q1, then the shorts may get their chance to cash in.
I could try but not likely produce a better synopsis of the IPO. Great post Sir Henry.
Article may be right on both counts that a concern for moving away from Vivint is causing the increase in short interest but being wrong about it could backfire on the hedge funds. Enphase not giving away the farm to go on lease installs could be a good thing for profit if they can keep growing demand without them.