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Solar names have come down from their once very lofty valuations and I am of the opinion that there is an increasingly improving value in the industry that has such a strong growth profile, supported by favourable
Enphase: Solar Leader With Attractive Risk Reward Opportunity And Strong Growth Profile
Summary
- Enphase is market leader in micro-inverters due to differentiated product based on technology and customer service and strong sales strategy.
- Focus on new, high growth segments like residential energy storage, small commercial market, international expansion and EV charging solutions.
- FCF generating machine with potential for more acquisitions to expand into new markets.
- Based on my equal weight valuation of EV/EBITDA multiple and DCF method, I derive a target price of $218 for Enphase, implying a 34% upside from current prices, which I believe to be an excellent buying opportunity.
Simple Investing is a former hedge fund and long-only portfolio manager with a track record for outperformance. He managed more than $1 billion in AUM, and is a CFA charter holder who holds degrees in Finance and Accounting. He runs the Investing Group Outperforming the Market.
While having a pure growth or pure value portfolio may do well in certain markets, it leaves investors vulnerable to certain investment styles going out of favor. The objective of Outperforming the Market is to outperform the S&P 500 across market cycles. This is achieved through The Barbell Portfolio, which is comprised of high conviction growth and contrarian stocks.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of ENPH either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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