𝗔𝗿𝗲 𝗧𝗵𝗶𝗻𝗴𝘀 𝗛𝗲𝗮𝘁𝗶𝗻𝗴 𝗨𝗽 𝗳𝗼𝗿 𝗦𝗼𝗹𝗮𝗿? 🌞
It was only the beginning of this year when investors on Wall Street were treating renewable energy stocks like they were millionaire makers. In January, with President Biden taking office in the United States, many believed that these energy stocks were about to pop. And pop they did, although that uptrend was definitely temporary.
Enphase Energy (NASDAQ: $ENPH ) was definitely one of those stocks. It’s been an up and down year for Enphase, as shares are basically flat in 2021. The stock is up just over 50% over the past year though, which handily outpaces the benchmark S&P 500 index.
𝗘𝗻𝗽𝗵𝗮𝘀𝗲 𝗵𝗮𝘀 𝘀𝗼𝗺𝗲 𝘀𝘁𝗶𝗳𝗳 𝗰𝗼𝗺𝗽𝗲𝘁𝗶𝘁𝗶𝗼𝗻 💪
The solar industry is surprisingly concentrated, especially in the consumer market. Other companies like First Solar (NASDAQ: $FSLR ), SolarEdge Technologies (NASDAQ: $SEDG ), SunPower Corporation (NASDAQ: $SPWR ), and even Tesla (NASDAQ: $TSLA ) are providing stiff competition to Enphase. Still, Enphase is moving into a broader consumer service market where it is introducing software integrated, complete energy systems for households.
This includes solar panels, power storage units, and of course the product that put Enphase on the map: the solar microinverter. These instruments actually convert direct power from solar panels into AC or alternating current. This allows Enphase’s software to manage and monitor the energy for each solar panel, rather than the entire energy system as a whole.
𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻𝘀 𝗮𝗻𝗱 𝗦𝘁𝗼𝗰𝗸 𝗨𝗽𝗴𝗿𝗮𝗱𝗲𝘀 💰
Enphase made a couple of key acquisitions over the past few months which the company believes will help over the long run. The acquisitions of SOFDESK and Din Engineering Services are helping to shape Enphase’s future outlook, by improving the consumer buying experience, as well as an inevitable expansion into small businesses and other segments in the commercial sector. All of this activity has provided a nice stock upgrade to an overweight rating and a $179 price target from Keybanc.
There have also been several high profile business advancements including an energy system for an entire community in Australia, as well as expansion into the rapidly growing Brazilian market, as well as other countries like Italy. Renewable energy sources have been a well documented secular trend that is affecting countries all over the world. As the world inches toward the ultimate goal of being carbon neutral, Enphase is playing an important part in it all.
𝗪𝗵𝗮𝘁 𝗱𝗼𝗲𝘀 𝘁𝗵𝗲 𝗳𝘂𝘁𝘂𝗿𝗲 𝗵𝗼𝗹𝗱 𝗳𝗼𝗿 𝗘𝗻𝗽𝗵𝗮𝘀𝗲? 🔮
With an industry that is as hot and cold as the solar and renewable energies industry, it is difficult to project what 2022 will bring for Enphase. On one hand, President Biden has pledged trillions of dollars to upgrading American renewable energy infrastructure, but due to the chaos of the COVID-19 pandemic, this has been pushed to the backburner so to speak.
Wall Street is gradually getting bullish on stocks like Enphase, and as climate change and carbon neutrality continue to make headlines around the world, companies like Enphase should only continue to grow which will command higher valuations for the stock.
Thanks for reading,