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My thesis
Since the fall of 2023, the sector has suffered a massive fall in demand due to rising interest rates, falling electricity prices, and changes in NEM regulation in California and the Netherlands. Enphase (
Enphase: Light Can Be Seen In The Tunnel
Summary
- Enphase generated strong cash flow despite the adverse business environment thanks to its good pricing power, IRA subsidies, and cost management measures.
- Distributor Inventory channels in the US are clean, but macro trends remain weak in Europe, postponing a V-shape recovery.
- The firm remains ideally a place to benefit from gradual rate cuts and growing business development, such as in the battery segment, where it has a solid market share.
- Thesolid balance sheet and my DCF indicate upside potential. I rate the stock as a BUY.
Hello readers! Passionate about technology, my focus will be on finding and analyzing companies that can play a relevant role in today's geopolitics, leverage their IP, and eventually, with time, become new leaders. Therefore, the investment style will correspond to growth companies with a bias on the mid-cap segment. The main sectors under study will be biotechnologies, computer chips, cloud technology, energy, and commodities. Special attention will be given to risks surrounding business cases, with a top-down approach completing each bottom-up analysis. A systematic balance sheet analysis will be performed as growing businesses often fail the funding test. In contrast, a stress test will be employed to challenge my thesis and see what degree of safety lies in each model. Long-term capital appreciation will be preferred over short-term speculation. Holding a master's in communication and an MBA and having completed my experience in journalism, I will be happy to share my ideas and points of view with you. As an SA contributor since 2023, I look forward to your comments to help me improve my work and will do my best to provide you with the most extensive coverage in these thematics. Best regards
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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