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Enphase Energy (ENPH) to Post Q3 Earnings: What's in Store?

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Enphase Energy (ENPH) to Post Q3 Earnings: What’s in Store?

Teaser: Enphase Energy's (ENPH) Q3 results are likely to reflect gains from solid installations and modest microinverter price increases.

Enphase Energy, Inc. (ENPH) is slated to report third-quarter 2021 results on Oct 26, after the closing bell.

In the last reported quarter, the company delivered an earnings surprise of 26.19%. Its bottom line outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 28.82%.

Factors to Note

Enphase Energy’s Storage Systems demand has been gaining momentum in the past few quarters, which has resulted in the company being fully booked in the third quarter on storage. This might have favorably impacted its shipments, thereby is likely to get reflected in the to-be-reported quarter’s revenues.

The company’s third-quarter top line is likely to reflect benefits from the launch of its Enphase Installer Network, and manufacturing capacity expansion in Mexico and India in the second quarter. The company installed a second fully automated line in its facility in India, which commenced operations at the end of the second quarter.

Around the end of the third quarter, Enphase Energy launched its IQ 7+ microinverters in Brazil, which in turn might have contributed favorably to its quarterly performance.

The company began selling its Enphase storage systems in Germany during the late second quarter. This development along with robust growth in the Netherlands and France, and continued strong microinverter sales to Maxeon for its ACM product drove record revenues from Europe in the second quarter. Given the recent demand uptick observed in global solar market, we expect a similar trend to have prevailed in the soon-to-be-reported quarter as well.

All the aforementioned developments are likely to have positively contributed toward overall revenue growth in the third quarter.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $345.5 million, suggesting growth of 93.6% from the year-ago quarter.

The company’s modest hike in pricing of microinverter in the third quarter is likely to have offset increased logistics and component costs. This may have aided its margins in the to-be-reported quarter.

The Zacks Consensus Estimate for third-quarter earnings is pegged at 48 cents per share, indicating an improvement of 60% from the prior-year reported figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Enphase Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here.

Earnings ESP: The company’s Earnings ESP is -2.39%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Enphase Energy currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are three solar players you may want to consider, as these have the right combination of elements to post an earnings beat this season:

FTC Solar, Inc (FTCI)has an Earnings ESP of +6.57% and a Zacks Rank #3.

Array Technologies (ARRY) has an Earnings ESP of +146.67% and a Zacks Rank #3.

Sunrun (Run) has an Earnings ESP of +555.44% and a Zacks Rank #2.

Enphase Energy, Inc. ENPH is slated to report third-quarter 2021 results on Oct 26, after the closing bell.

In the last reported quarter, the company delivered an earnings surprise of 26.19%. Its bottom line outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 28.82%.

Factors to Note

Enphase Energy’s Storage Systems demand has been gaining momentum in the past few quarters, which has resulted in the company being fully booked in the third quarter on storage. This might have favorably impacted its shipments, thereby is likely to get reflected in the to-be-reported quarter’s revenues.

The company’s third-quarter top line is likely to reflect benefits from the launch of its Enphase Installer Network, and manufacturing capacity expansion in Mexico and India in the second quarter. The company installed a second fully automated line in its facility in India, which commenced operations at the end of the second quarter.

Around the end of the third quarter, Enphase Energy launched its IQ 7+ microinverters in Brazil, which in turn might have contributed favorably to its quarterly performance.

The company began selling its Enphase storage systems in Germany during the late second quarter. This development along with robust growth in the Netherlands and France, and continued strong microinverter sales to Maxeon for its ACM product drove record revenues from Europe in the second quarter. Given the recent demand uptick observed in global solar market, we expect a similar trend to have prevailed in the soon-to-be-reported quarter as well.

All the aforementioned developments are likely to have positively contributed toward overall revenue growth in the third quarter.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $345.5 million, suggesting growth of 93.6% from the year-ago quarter.

The company’s modest hike in pricing of microinverter in the third quarter is likely to have offset increased logistics and component costs. This may have aided its margins in the to-be-reported quarter.

The Zacks Consensus Estimate for third-quarter earnings is pegged at 48 cents per share, indicating an improvement of 60% from the prior-year reported figure.

Enphase Energy, Inc. Price and EPS Surprise

Enphase Energy, Inc. Price and EPS Surprise
Enphase Energy, Inc. Price and EPS Surprise

Enphase Energy, Inc. price-eps-surprise | Enphase Energy, Inc. Quote

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Enphase Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that is not the case here.

Earnings ESP: The company’s Earnings ESP is -2.39%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Enphase Energy currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Here are three solar players you may want to consider, as these have the right combination of elements to post an earnings beat this season:

FTC Solar, Inc FTCIhas an Earnings ESP of +6.57% and a Zacks Rank #3

.

Array Technologies ARRY has an Earnings ESP of +146.67% and a Zacks Rank #3.

Sunrun RUN has an Earnings ESP of +555.44% and a Zacks Rank #2.


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Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report

Array Technologies, Inc. (ARRY) : Free Stock Analysis Report

Sunrun Inc. (RUN) : Free Stock Analysis Report

FTC Solar, Inc. (FTCI) : Free Stock Analysis Report

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