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Enphase Energy (ENPH) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

Enphase Energy (ENPH) closed at $180.32 in the latest trading session, marking a +1.72% move from the prior day. This change outpaced the S&P 500's 0.08% gain on the day. At the same time, the Dow added 0.38%, and the tech-heavy Nasdaq lost 0.29%.

Coming into today, shares of the solar technology company had gained 30.33% in the past month. In that same time, the Oils-Energy sector gained 6.72%, while the S&P 500 gained 3.8%.

Investors will be hoping for strength from ENPH as it approaches its next earnings release. On that day, ENPH is projected to report earnings of $0.39 per share, which would represent no growth from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $256.80 million, up 22.27% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.26 per share and revenue of $766.39 million, which would represent changes of +32.63% and +22.75%, respectively, from the prior 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.

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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.72% lower within the past month. ENPH is currently a Zacks Rank #3 (Hold).

Digging into valuation, ENPH currently has a Forward P/E ratio of 140.69. This valuation marks a premium compared to its industry's average Forward P/E of 61.06.

Also, we should mention that ENPH has a PEG ratio of 4.04. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Solar was holding an average PEG ratio of 2.68 at yesterday's closing price.

The Solar industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 188, putting it in the bottom 27% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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