Enphase Earnings Were So Good, First Solar, Other Solar Stocks Rise Too

0

Text size

Enphase earnings lifted much of the solar power sector on Wednesday.

David McNew/Getty Images

Solar specialist


Enphase Energy

Earnings were so good that the whole sector shone brightly on Wednesday.

Fremont, Calif.-based Enphase’s third-quarter results beat Wall Street expectations as the leader in home solar power systems and a pioneer in inverter technology reported record revenue after the Markets close Tuesday.

Enphase stock jumped 22% on Wednesday morning, helping the


Invesco Solar Exchange Traded Fund

(TAN) – which counts Enphase as its second-largest holding – rose 6.3%.

The rest of the area was beaming too.


First Solar

(FSLR) jumped 4.8%,


SunRun

(RUN) increased by 3.3%,


SolarEdge

(SEDG) jumped 6.1%, and


Shoal Technologies

(SHLS) climbed 7.4% in premarket trading. The four companies are manufacturers of solar panels, batteries or systems for solar energy projects.

In the third quarter, Enphase posted record sales of $352 million, up from $179 million a year ago and ahead of analyst expectations of $345 million, according to FactSet data. Net profit was $22 million, beating estimates of $16 million, while an adjusted measure of net profit showed a profit of $84 million. Adjusted earnings per share (EPS) was $0.60, ahead of estimates by $0.49.

Enphase expects to set a new revenue record in the next quarter, with sales prospects of between $390 million and $410 million.

The company has announced a new type of energy system driven by its IQ8 solar microinverters, which convert direct current (DC) generated by solar panels into alternating current (AC).

“Many homeowners often assume that their solar systems will work if the sun is shining, even during a power outage. Unfortunately, this has not been true until today. Now, with IQ8, homeowners can realize the true promise of solar power: generating and using their own electricity,” said Enphase President and CEO Badri Kothandaraman.

Analysts at investment banking advisory group Evercore reiterated their “outperform” rating on Enphase shares, which they gave a price target of $216. Enphase stock ended Tuesday at $173.46, so Evercore’s target implies a more than 25% upside. Analysts said the company was “in the midst of a breakthrough new product cycle” with IQ8.

The Evercore team, as well as analysts at asset manager Guggenheim Partners, also noted that the company continues to face supply chain and logistics issues, but is doing a good job. to manage them.

Write to Jack Denton at jack.denton@dowjones.com

Share.

Comments are closed.