Enphase Energy (ENPH)

An interest rate play. Stay away.

The worst S&P stock of 2023, killed by rising interest rates and collapsed energy price, down 66%. Before that, ENPH was a winner. You need to borrow to buy their solar panels, hence the interest rates.

Down 59% this year with the sector, because of high interest rates. With rates easing, shares climbed today.

Still no. And tax-loss selling will also impact this name. Are better names out there.

The sector is certainly under siege right now. Enphase's inverter shipments fell sequentially in 3Q to around 1.6 gigawatts vs. 2.1 GW in 2Q, though the declines could begin to subside in 2024 as inventories normalize. Sales dropped about 13% in 3Q, toward the lower end of revised guidance, and will likely be flat in 2023 given macroeconomic conditions in the US and Europe. Tax benefits included in the Inflation Reduction Act have supported margin expansion. Adjusted gross margin topped 48% in 3Q and could stay above 45% through year-end. Though the company only shipped 86 megawatt-hours worth of batteries in the quarter, a ramp-up in 2024 is possible as Enphase looks to expand production in the US and sell in new territories. ENPH is down to 17X earnings, but with a decline of 70% this year tax-loss selling is very likely. It has a decent balance sheet, but we would not step into this one on the buy side yet. 
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Is down 55% this year. Sells to mostly homeowners, so is exposed to higher interest rates. Reported last July with soft guidance with a small sales shortfall. Suffers excess inventory that could worsen. It is profitable. The PE has fallen from 60x forward to 24x forward. Are expanding in Europe, which could offset the weaker US market. He's torn over this and has made the wrong call on this this year. It's a show-me stock.

Has long liked this. It turned out to be a financing play rather than a solar play. Shares should have bounced by now, and it hasn't--and he owns this miscall

As risky as it gets in a weak group. IS down 30% YTD, the opposite of First Solar. That said, Enphase is a key cog in the solar machine and shares haven't been this cheap since 2020. Will recover with the sector. Higher interest rates have held this back.

They missed their quarter. Some feel they're a finance company rather than an energy one. Buy a small portion.

Solar micro-inverters. Technology is taking over string inverters, as it's more efficient and flexible. Moving from components, like inverters, and into systems like EV batteries and storage. No dividend. 

It reports Wednesday.  If you believe in the future of solar power, then this one's a winner.