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

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Enphase Energy (ENPH) closed at $173.78 in the latest trading session, marking a +0.33% move from the prior day. This change lagged the S&P 500's 1.71% gain on the day.

Coming into today, shares of the solar technology company had gained 11.37% in the past month. In that same time, the Oils-Energy sector gained 11.88%, while the S&P 500 lost 2.25%.

ENPH will be looking to display strength as it nears its next earnings release, which is expected to be October 26, 2021. The company is expected to report EPS of $0.48, up 60% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $345.52 million, up 93.57% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.10 per share and revenue of $1.34 billion. These totals would mark changes of +53.28% and +73.02%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for ENPH. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 0.28% lower within the past month. ENPH currently has a Zacks Rank of #4 (Sell).

In terms of valuation, ENPH is currently trading at a Forward P/E ratio of 82.53. This valuation marks a premium compared to its industry's average Forward P/E of 70.96.

Investors should also note that ENPH has a PEG ratio of 2.37 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Solar was holding an average PEG ratio of 2.37 at yesterday's closing price.

The Solar industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 227, which puts it in the bottom 11% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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