Enphase Energy (ENPH -9.3%) and Solaredge Technologies (SEDG -4.6%) turn sharply lower after a report from Citron Research says their shares are trading at "significantly inflated multiples on peak earnings even as a very credible competitive threat is about to enter the solar inverter market."
The report points to Generac (GNRC +0.7%) as a major new competitive entrant with "the resources and track record to make a huge dent in both SEDG and ENPH's market shares."
At its investor day, GNRC said it has engaged in productive talks with the largest U.S. residential solar installers in the country, Sunrun (RUN +1.1%) and Vivint Solar (VSLR +0.4%), and with the largest U.S. solar distributor, CED Greentech, to distribute its product.
GNRC is not followed by Wall Street solar analysts, so its commercial launch announced last week has gone completely unnoticed, Citron says.
Citron thinks SEDG shares are worth $51-$52 and ENPH is worth $6-$7 over the next 6-18 months.
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