Enphase Energy, Inc. (ENPH) in Petaluma, California, is a provider of home energy solutions to the global solar photovoltaic industry. ENPH shares have recently come under selling pressure due to ongoing supply chain disruptions and geopolitical tensions. The stock has fallen 18.9% since the start of the year.
Additionally, the company faces limited inventory for its energy storage products. Its cash and cash equivalents decreased 82.4% year-over-year to $119.32 million for its fiscal year ended December 31, 2021. Its net income decreased 27.9% from year-over-year to $52.59 million, and its earnings per share were down 26% year-over-year to $0.37.
The solar industry is expected to experience marked growth, driven by a surge in demand and increasing investment in clean energy. According to a report by Report Linker, the solar power market in the United States is expected to reach 13.55 gigawatts by 2026, with a CAGR of 9.69%. Given these factors, Wall Street analysts are bullish on quality solar stocks Sunrun Inc. (CLASSES), Sunnova Energy International Inc. (NOVA) and Shoals Technologies Group, Inc. (SHLS).
Sunrun Inc. (CLASSES)
Based in San Francisco RUN designs, develops, markets, sells and services residential solar energy systems in the United States. The Company sells solar power systems and products including solar generated panels, storage batteries and wires to customers. It mainly serves residential owners.
Last January, RUN replaced its $250 million recourse loan facility with a larger $425 million facility on improved terms and with a longer term. This broadens its asset borrowing base and supports more efficient inventory financing. The enhanced loan facility is expected to support the company’s continued growth.
Last December, RUN and BRIDGE Housing celebrated the completion of solar installations serving 94 rental units in Suisun City, California. This partnership is expected to provide clean energy access and savings on tenant bills across California and increase revenue streams.
During the fourth quarter of fiscal 2021, ended December 31, 2021, RUN’s total revenue increased 35.8% year-over-year to $435.23 million. The company’s cash increased by 18.8% for a year ended December 31, 2021, to reach $617.63 million. RUN’s total assets grew 14.6% year-over-year to $16.48 billion as of December 31, 2021.
Consensus revenue estimate of $416.43 million for the first fiscal quarter, ending March 31, 2022, represents 24.4% year-over-year growth over the same period in 2021 The Street expects RUN’s EPS to improve 30.5% year-over-year in the current quarter. The company has an impressive track record of earnings surprises; it has exceeded consensus EPS estimates in three of the last four quarters.
The stock has gained 1.6% in price over the past five days. However, the 12-month median price target of $52.93 indicates 128.8% upside potential from yesterday’s closing price of $23.13. Price targets range from a low of $16.15 to a high of $91.00. Of the 14 Wall Street analysts who rated RUN, 11 rated it Buy, one rated it Hold, while two rated it Sell.
Sunnova Energy International Inc. (NOVA)
NOVA is a leading provider of residential solar and energy storage services in the United States. The Houston, Texas-based company offers operations, maintenance, monitoring, repair, equipment upgrade, power optimization and diagnostic services. It has a generating capacity of over 790 megawatts and serves approximately 107,000 customers.
On February 1, 2022, NOVA and Generac expanded their strategic partnership to deliver new hardware technology with increased resiliency to homeowners through energy-independent Sunnova Adaptive Home. Through this partnership, NOVA could leverage its dealer and installer networks, expand its customer base and increase its revenue.
Last November, NOVA launched an exclusive partnership with Brinks Home to offer home security and energy solutions to its customers. Thanks to this partnership, NOVA should integrate new technologies in its offers, reach new customers and increase its sources of income.
NOVA’s revenue increased 37.3% year-over-year to $68.90 million during its fiscal 2021 third quarter ended September 30, 2021. The company’s cash increased by 94 .5% over the nine months ended September 30, 2021, to reach $408.16 million. NOVA’s total assets grew 41.1% over the past nine months to $5.06 billion.
Analysts expect NOVA’s revenue for its fiscal fourth quarter, ended Dec. 31, 2021, to be $65.70 million, a 72.8% year-over-year increase. other. Analysts expect NOVA’s EPS to improve 72.9% year over year in the quarter to be reported.
Over the past year, NOVA shares have fallen 65.5%. However, the 12-month median price target of $40.13 indicates a 134.4% upside potential from yesterday’s closing price of $17.12. Price targets range from a low of $28.00 to a high of $53.00. Each of the eight Wall Street analysts who rated NOVA rated it Buy.
Shoals Technologies Group, Inc. (SHLS)
SHLS offers Electrical Balance of System (EBOS) solutions for solar power projects in the United States. . SHLS markets and sells its products to engineering, construction and supply companies that build solar power projects.
Last January, SHLS announced a strategic agreement with Luminace to pursue distributed renewable energy generation and electric vehicle charging solutions across the United States. Through this collaboration, SHLS could leverage its innovative technology, expand its customer base and increase its profits.
Last November, SHLS and SKYCHARGER partnered to evolve the electric vehicle charging infrastructure by offering innovative solutions. SHLS’ EV solutions will reduce the speed of deployments and reduce site costs. This partnership should increase the company’s customer base and profitability.
During the third quarter of its fiscal 2021, which ended September 30, 2021, SHLS’s revenue increased 13.8% year-over-year to $59.84 million. SHLS’ gross profit rose 5.2% year over year to $21.77 million. The company’s cash and cash equivalents increased 40.9% in the nine months ended September 30, 2021, to $14.19 million. And its total assets grew 96% in the nine months to $382.81 million.
The consensus revenue estimate of $72.37 million for the fiscal first quarter ending March 2022 represents 58.7% year-over-year growth over the same period in 2021. The Street expects SHLS EPS to improve 92% year-over-year in the current quarter to come in at $0.10. The company has an impressive track record of earnings surprises; it has exceeded consensus EPS estimates in three of the last four quarters.
The stock has fallen 45.4% since the start of the year. However, the 12-month median price target of $30.33 indicates upside potential of 128.6% from yesterday’s closing price of $13.27. Price targets range from a low of $20.00 to a high of $39.00. Of the six Wall Street analysts who rated SHLS, four rated it Buy, while two rated it Hold.
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RUN shares were trading at $21.41 per share on Friday afternoon, down $1.72 (-7.44%). Year-to-date, RUN is down -37.58%, compared to a -8.74% rise in the benchmark S&P 500 over the same period.
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using its fundamental approach to stock analysis, Mangeet seeks to help retail investors understand the underlying factors before making investment decisions. Continued…