I’m holding off till after 1Q numbers come out before increasing my 9% allocation. They have already warned that the numbers in the US may be soft… but I figure there is a good chance the share price may take a hit anyway. Overall though, I see an investment here as a no brainer (for me) and have no reluctance to add post-1Q regardless.
I wish the Fool would provide quality write ups like what you did. I understand that a lot of folks don’t want details. Perhaps they could do an executive summary, followed by those details.
Thanks for the write up!
Rob
He is no fool who gives what he cannot keep to gain what he cannot lose.
Great write up!
Like you, I am not convinced by Badri’s comment as to NEM 3.0 will be a big positive for ENPH. I read a survey that 90% of responders comment they would not buy solar/battery after NEM 3.0
On the other hand, I am very impressed by the management’s superb vision and ability to improve margin and minimize heavy capital outlay. In earlier years of Badri’s tenure, he re-engineered the products to significantly reduce the number of components to get tariff tax reimbursement. Lately, they have managed to stay at the same 45-46% gross margin level, amidst the overall high inflation across all materials. They use various suppliers to make the panel/battery, with no minimal volume commitment and bear no capital outlay risk.
The stock price is sure volatile. I plan to stay under 5% allocation and wait out till Q2 ER as we shall get a glimpse of NEM 3.0 impact (effective in Apr).
NEM 3.0 will be a long and slow uptake, but it will be real (outside of CA). It will take some education by the installers, and some changes in PUC (utilities regulators etc). In many places, I imagine installers will be suggesting this as a future-proof option to their customers, and that will be a bit of a hard sell to spend money up front, hoping it will pay off for them. For me, I will simply be installing the storage at my Colorado Mountain home for backup reasons. My utility doesn’t charge me different rates at different times, because they are simply too far behind the curve. But it will be coming. My architect is on the BOD for the utility co-op and states that they are slowly starting to realize that Solar isn’t the competition, it’s their golden goose.
Enphase Energy (NASDAQ:ENPH) is Thursday’s top gainer on the S&P 500, +5.1%, as Deutsche Bank taps the stock as its top pick among solar stocks, initiating a Short-Term Catalyst Buy rating ahead of Q1 results.
Enphase (ENPH) also is Deutsche Bank’s top long-term buy idea, with a $280 price target, and the bank is “bullish on the company’s market positioning with growth opportunities in the European market,” analyst Corinne Blanchard wrote…
not to be a party pooper but ENPH stock saw 96% drawdown from 22 sep 14 to 22 may 17. the price of stock was just 65 cents in 2017. it then recently peaked at 340 from 65 cents!
if you see XLE (energy etf) peaked on 16 jun 2014 and then was on decline until 2020.
Solar got boost due to this pro-green democrat policies and also this oil spike is helping process. however, understand this OPEC cartel is very conscious about alternative energy (having lived in middle east 20 yrs ago). I remember very well that they wanted to balance the price that alternative energy is not profitable and they have maximum profit/output. so, i think high energy prices will not last long and will be headwind for energy sector. cheaper oil will stump alternative energy growth rates.
and if republicans come back they support big oil over green policies. the risks are real for a stock that has gone from 65 cents to $340 for 523x gain!
Stryker, your post is on the verge of starting a political discussion which is VERY off topic for our board. If further posts go that way they will be deleted, and yours as well.
Saul
My intention is to only discuss prospects of Enphase. The reality is political leadership does really matter to this company. I don’t care about politics I only care about impact of leadership on my company’s future.
Anyways other then this think logically if tomorrow 50% cars in us go ev it will destroy demand for gas and hence cut price on pump leading people to buy gas cars again. OPEC will reduce prices of gas as much as needed so they can sell most of their oil on ground. If that means 10 dollar oil they will do it.
And Denny you may call my prices cherry picked but they are fact and indicate this is “cyclical” stock
My prediction on this stock
It will possibly retest its high until 2024 and then possibly bust again like 2014 to 2017. Short term it looks setup to go higher I am not arguing with that. Just understand risks
Personally I don’t feel ev car is worth buying today at todays oil price yes but not with where I see oil in future
Stryk,
There is at least one significant change from the past to take into account - the increased performance of alternative energy. In particular solar panels and battery storage. The projections provided me before I bought solar panels in 2020 called for 28 mKw? per year and that was a 7 year breakeven after taxes. In reality, my system has produced 35 mKw per year, 25% more. That would greatly reduce the breakeven.
The ENPH system is even more efficient. I realize that the Saudis, because their cost to produce a barrel of oil is cheapest among oil producers, will set prices for the world. But they cannot price so low that other producers are forced to sell at a loss (long term). And as panels become more efficient, the market size expands. More folks will buy at a 4 year breakeven than would with a 7 year breakeven.
Additionally, fuel heating oil is the dinosaur (see what i did there?). US heating oil consumption was almost a billion barrels a year in the 70’s and has steadily declined to where it was under 200 mm barrels a year in 2020. Irrespective of oil prices, solar’s advantage is growing over time and will likely continue to grow.
Enphase just announced the introduction of the IQ8 micro inverters to Spain and Portugal in addition to the other EU countries already being served (Germany, France, Holland, Belgium, at least, as I remember).
Saul