ARRY vs. ENPH: Which Stock Is the Better Value Option?
Investors interested in Solar stocks are likely familiar with Array Technologies, Inc. (ARRY) and Enphase Energy (ENPH). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Array Technologies, Inc. has a Zacks Rank of #2 (Buy), while Enphase Energy has a Zacks Rank of #3 (Hold). This means that ARRY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ARRY currently has a forward P/E ratio of 20.77, while ENPH has a forward P/E of 26.21. We also note that ARRY has a PEG ratio of 0.41. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ENPH currently has a PEG ratio of 1.13.
Another notable valuation metric for ARRY is its P/B ratio of 10.85. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ENPH has a P/B of 18.63.
Based on these metrics and many more, ARRY holds a Value grade of B, while ENPH has a Value grade of D.
ARRY sticks out from ENPH in both our Zacks Rank and Style Scores models, so value investors will likely feel that ARRY is the better option right now.
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Array Technologies, Inc. (ARRY) : Free Stock Analysis Report
Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report
