Enphase Energy Inc’s (NASDAQ:ENPH): Enphase Energy, Inc., together with its subsidiaries, designs, develops, and sells microinverter systems for residential and commercial markets in the United States and internationally. The US$462.85M market-cap company announced a latest loss of -US$45.19M on 31 December 2017 for its most recent financial year result. As path to profitability is the topic on ENPH’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ENPH, its year of breakeven and its implied growth rate.
ENPH is bordering on breakeven, according to analysts. They expect the company to post a final loss in 2018, before turning a profit of US$15.31M in 2019. ENPH is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which ENPH must grow year-on-year. It turns out an average annual growth rate of 143.80% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for ENPH given that this is a high-level summary, however, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I would like to bring into light with ENPH is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.
There are too many aspects of ENPH to cover in one brief article, but the key fundamentals for the company can all be found in one place – ENPH’s company page on Simply Wall St. I’ve also compiled a list of relevant aspects you should further examine:
- Valuation: What is ENPH worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether ENPH is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Enphase Energy’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.