This report is the updated version of the report uploaded on 19 July 2023 at 12:46 PM PDT

Enphase Energy, Inc.

ENPH Details

Enphase Energy (NYSE: ENPH) is the global energy technology company.

Financial Results

• The company announced the financial results for the Q1 FY 2023. The company reported quarterly revenue of $726.0 Mn in the Q1 FY 2023, along with 45.7% for non-GAAP gross margin. It was able to ship 4,830,589 microinverters, or ~1,957.2 megawatts DC, and 102.4 megawatt hours of Enphase® IQ™ Batteries.
• The company posted GAAP operating income of $167.7 Mn as well as non-GAAP operating income of $233.6 Mn.
• Total revenue for Q1 FY 2023 was $726.0 Mn as compared to $724.7 Mn in the Q4 FY 2022. Its revenue in the US for the first quarter of 2023 decreased ~9% because of the seasonality as well as macroeconomic conditions, while the revenue in Europe increased ~25% as compared to the fourth quarter of 2022.

Outlook

For Q2 FY 2023, the company is expecting its revenue to be within the range of $700.0 Mn - $750.0 Mn, which includes shipments of 80 - 100 megawatt hours of Enphase IQ Batteries. Its GAAP gross margin is anticipated between 41.0% - 44.0%. 

Key Risks

The unfavorable macroeconomic as well as market conditions could adversely affect the company’s industry, business and financial results. Challenges related to the current supply chain constraints could impact the business.

Fundamental Valuation

EV/Sales Based Relative Valuation

Stock Recommendation

The company’s performance is exposed to the risks related to the global slowdown as well as geopolitical tensions. The solar industry is highly competitive, and the company is expecting to witness higher competition as new and existing competitors introduce products or develop alternative technologies. This could impact its business and financial condition.

Hence, a ‘Sell’ rating is assigned to the stock at the current market price of USD 186.66 (as of 19 July 2023, 07:00 am PDT).

Technical Overview:

Daily Price Chart

Markets are trading in a highly volatile zone currently due to certain macro-economic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

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