๐๐ฟ๐ฒ ๐ง๐ต๐ถ๐ป๐ด๐ ๐๐ฒ๐ฎ๐๐ถ๐ป๐ด ๐จ๐ฝ ๐ณ๐ผ๐ฟ ๐ฆ๐ผ๐น๐ฎ๐ฟ? ๐
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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. Itโs 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.
๐๐ป๐ฝ๐ต๐ฎ๐๐ฒ ๐ต๐ฎ๐ ๐๐ผ๐บ๐ฒ ๐๐๐ถ๐ณ๐ณ ๐ฐ๐ผ๐บ๐ฝ๐ฒ๐๐ถ๐๐ถ๐ผ๐ป ๐ช
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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 Enphaseโs software to manage and monitor the energy for each solar panel, rather than the entire energy system as a whole.
๐๐ฐ๐พ๐๐ถ๐๐ถ๐๐ถ๐ผ๐ป๐ ๐ฎ๐ป๐ฑ ๐ฆ๐๐ผ๐ฐ๐ธ ๐จ๐ฝ๐ด๐ฟ๐ฎ๐ฑ๐ฒ๐ ๐ฐ
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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 Enphaseโs 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.
๐ช๐ต๐ฎ๐ ๐ฑ๐ผ๐ฒ๐ ๐๐ต๐ฒ ๐ณ๐๐๐๐ฟ๐ฒ ๐ต๐ผ๐น๐ฑ ๐ณ๐ผ๐ฟ ๐๐ป๐ฝ๐ต๐ฎ๐๐ฒ? ๐ฎ
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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,
Santiago