Enphase: Sell-Off Presents Opportunity To Buy Quality Solar Leader

Simple Investing
Investing Group Leader

Summary

  • Enphase sold off on weaker guidance, but I am of the opinion that guidance was deliberately conservative given uncertain near-term outlook.
  • While there was a slowdown in the US in 1Q23, management expects this to be temporary and sell-through to improve sequentially.
  • Europe, new product launch and expansion of manufacturing capacity brings upside to the investment case.
  • The company is run by stellar management with strong execution and strong grasp of capital allocation.
  • My 1-year price target is $230, implying 45% upside from current levels.
  • This idea was discussed in more depth with members of my private investing community, Outperforming the Market. Learn More »

Enphase headquarters in Silicon Valley

Sundry Photography

Enphase (NASDAQ:ENPH) has sold off in the past five months and it was worsened by the recent 1Q23 result, which resulted in a decline in its share price by almost 30%.

In this article, I looked deeper into

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This article was written by

Simple Investing
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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.

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Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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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