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Enphase Energy (ENPH) Gains But Lags Market: What You Should Know

·3 min read

Enphase Energy (ENPH) closed at $317.41 in the latest trading session, marking a +0.35% move from the prior day. This change lagged the S&P 500's 0.66% gain on the day. Elsewhere, the Dow gained 0.61%, while the tech-heavy Nasdaq added 0.05%.

Heading into today, shares of the solar technology company had gained 4.31% over the past month, lagging the Oils-Energy sector's gain of 4.6% and outpacing the S&P 500's loss of 3.79% in that time.

Wall Street will be looking for positivity from Enphase Energy as it approaches its next earnings report date. The company is expected to report EPS of $1.07, up 78.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $615.95 million, up 75.22% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.09 per share and revenue of $2.25 billion, which would represent changes of +69.71% and +63%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Enphase Energy. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.61% higher within the past month. Enphase Energy is currently a Zacks Rank #2 (Buy).

Looking at its valuation, Enphase Energy is holding a Forward P/E ratio of 77.35. For comparison, its industry has an average Forward P/E of 63.86, which means Enphase Energy is trading at a premium to the group.

Meanwhile, ENPH's PEG ratio is currently 1.64. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Solar was holding an average PEG ratio of 1.82 at yesterday's closing price.

The Solar industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 88, putting it in the top 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ENPH in the coming trading sessions, be sure to utilize Zacks.com.


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