Enphase beats handily

Enphase Energy (ENPH) shares were up 26%, to $12.66, in early trading Wednesday. (Actually trading even higher now)

The energy-technology company, which makes solutions to connect solar generation, storage and management, on Tuesday reported first-quarter revenue of $100.2 million, up from $70 million a year earlier. Consensus was for $92.5 million.

Adjusted EPS came in at 8 cents, from a 1-cent loss in the year-ago quarter, beating consensus for 5 cents.

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I’m with you. I doubled my position pre-market. More on what you have said and what TJ Roberts says. Went up 25% from there.

MoneySlob

Retirement day 1
Yawn, burp, scratch

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I have been holding this from the $5.50 range. Not a huge position but has been interesting to watch the companies turn around. Some might not agree but I am a firm believer that we are just scratching the surface with solar as technology continues to improve and there is more global push for renewables. Solar still only makes up a very small percentage of global energy production but the rate of capacity additions is increasing. I’ve seen some estimates staging renewables could make up 50% of global energy production by 2050. Enphase has a market cap under 2B just put that into perspective.

It sounds like there is a lot still planned for future services/products (there was mention of $2k average revenue per house with the potential for $10k per house in the future)

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Something to be aware of… This is the last year that the federal tax credit for installing solar is 30%.

This is causing a lot of folks to install solar before the tax credit goes away (or at least that is what the advertising is making them think). Luckily, the tax credit is simply going down. Next year it will be 26%. When the tax credit goes down, business will likely decrease. Particularly if the business is being pulled into 2019.

Vicki
Fool One Guide

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California’s solar mandate takes effect in 2020, so wouldn’t you expect a big offset from that? Also considering in the US California is by far the biggest solar market in the US.

Also besides the fact that the tax credit only affects installations in the US, there is plenty of growth in other emerging markets (I believe Central/South America will be huge in the future)

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I totally agree with you Vicki. The reduction of the tax credit will lead to a growth spurt in the industry during quarters 3 and 4, and revenues may then decline in subsequent quarters. On the other hand, tariffs may be removed, or (in the case of ENPH) alternate manufacturing sites are cropping up in areas already exempt from tariffs. In that case, the overall cost of a rooftop installation may actually decline.

But the most important consideration, for me, is the growth of rooftop solar globally. The potential for significant growth in Europe, The Middle East, Africa, India and Australia is impossible to predict, but it may be huge. Meanwhile, the various grid options ENPH offers will find new customers desiring distributed grid or off-grid options. I consider it a win-win.

Solar, as an industry, is just now coming to the fore. I cannot offer a prediction regarding the deployment of solar and at what extent or rate. All I can do is observe how this industry evolves here, there and everywhere. What I do not doubt at all is that ENPH will be worth considerably more by the end of this year.

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A little background… I live in California. I own 6 enphase micro-inverters on a small array. I also have a sunny boy inverter on a 33 panel array. While solar panels will last a long time (25+ years), inverters are something that are not expected to last more than about 10 years. We are in the process of replacing all of our enphase micro-inverters. So, I’m a customer not an investor in this company.

Historically, some people installed just enough solar to get them out of the highest priced electricity tier(s). This would make micro-inverters more cost effective. The way I read the CA Solar 2020 plan, folks will need to install enough solar to offset close to 100% of their electrical. The question is how Enphase competes for large solar installs.

If their average system is around $2K, that is for a small system, probably under 10 panels. A $10K system would be really large.

So, while California’s Solar 2020 is probably not bad for them, it may or may not drive significant growth.

Vicki
Fool One Guide

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