How much a stock’s price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.
What if you’d invested in Enphase Energy (ENPH) ten years ago? It may not have been easy to hold on to ENPH for all that time, but if you did, how much would your investment be worth today?
Enphase Energy’s Business In-Depth
With that in mind, let’s take a look at Enphase Energy’s main business drivers.
Incorporated in 2006, Enphase Energy, Inc. is a global energy technology company that delivers energy management technology for the solar industry. It designs, develops, manufactures and sells home energy solutions, which connect energy generation, energy storage and control and communications management on one intelligent platform.
Microinverters remain this California-based company’s legacy product. As of Dec 31, 2021, Enphase shipped more than 32 million microinverters. At present, more than 1.7 million Enphase residential and commercial systems have been deployed across 130 countries.
The company’s IQ platform is the current generation integrated solar, storage and energy management offering, which enables self-consumption and delivers its core value proposition of yielding more energy, simplifying design and installation, and improving system uptime and reliability. The Enphase Home Energy Solution with IQ uses a single technology platform for seamless management of the whole solution, enabling rapid commissioning with the Installer Toolkit; consumption monitoring with our Envoy Communications Gateway with IQ Combiner+, Enphase Enlighten, a cloud-based energy management platform, and our Enphase AC Battery. It also produces the world’s only truly integrated solar-plus-storage solution. Markedly, the Enphase Home Energy Solution with IQ platform consists of Enphase microinverters, the AC Battery, an Envoy gateway and Enlighten cloud-based software.
Currently, Enphase’s products cater to the residential and commercial markets of the United States, Canada, Mexico, Central America, Europe, Australia, New Zealand, India and certain other Asian markets. However, its largest market remains the United States. Over the last three years, revenues generated from the U.S. market have represented 69-80% of the company’s total revenues.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Enphase Energy a decade ago, you’re probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in July 2012 would be worth $34,687.50, or a 3,368.75% gain, as of July 11, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500’s rally of 187.85% and gold’s return of 6.67% over the same time frame.
Looking ahead, analysts are expecting more upside for ENPH.
Enphase Energy enjoys a strong position as a leading U.S. manufacturer of microinverters and fully integrated solar-plus-storage solutions. It is striving to expand in Europe steadily throughout 2022. Such expansion plans tend to boost its long-term growth in the battery storage market. The company has also been making acquisitions to boost its long-term growth, which should enable it to strategically grow its business and boost its revenues. It holds a strong solvency position. The stock has outperformed the industry in the past year. However, the shortage of semiconductors worldwide has been affecting the solar market. As a result, it is suffering from the supply-chain constraint, which may hurt its results to some extent. Also, a comparative analysis of its trailing 12-month EV/EBITDA ratio reflects a relatively gloomy picture.
The stock is up 10.33% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 1 higher, for fiscal 2022. The consensus estimate has moved up as well.
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