Enphase Energy, Inc.
ENPH
is set to report third-quarter 2020 results on Oct 27, after market close.
In the last reported quarter, the company delivered an earnings surprise of 21.43%. Moreover, the bottom line outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average being 19.59%.
Factors at Play
Demand in the global solar market is expected to have been depressed in the third quarter, thanks to the continued impact of the coronavirus outbreak and the slow pace of economic recovery. This in turn is expected to weigh on Enphase Energy’s third-quarter results.
In July, Enphase Energy started shipping its Encharge storage systems in the United States and thereafter ramped up the battery supply chain, observing solid demand for the same. Moreover, in Europe, the company started expanding its sales force in all key regions, even more than its original plan, in view of high demand. Such sales force expansion is expected to have brought in more revenues for the company from Europe. Together these favorable factors are expected to have provided some impetus to the company’s revenues this time around.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $169.8 million, indicating a 5.7% decrease from the figure reported in the year-ago quarter.
Enphase Energy, Inc. Price and EPS Surprise
Enphase Energy, Inc. price-eps-surprise
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Enphase Energy, Inc. Quote
On the brighter side, the company witnessed a nice pickup in sell-through during July. In particular, weekly sell-through in July was 14% better than in June. However, we are unsure whether this trend continued in the other two months of the third quarter and its impact on results.
With the adverse impacts of coronavirus looming large in most parts of the world, weak demand situation might have hampered the shipments of products manufactured by Enphase Energy. This suggests that the finished products are lying idle in the warehouse or storage facilities of the company, which, in turn, is expected to have escalated its quarterly storage or idle facility cost.
Further, the company incurred higher-than-expected stock-based compensation expenses in the second quarter, due to the timing difference of estimating the expense and receiving a third-party stock price forecast. The company expects the stock-based compensation expenses to remain at this level for the next several quarters. Such expenses might have dragged down Enphase Energy’s bottom line in the soon-to-be-reported quarter.
As a result, the Zacks Consensus Estimate for third-quarter earnings is pegged at 24 cents per share, implying a deterioration of 20% from the year-earlier quarter’s reported figure.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Enphase Energy this time around. The combination of a positive
Earnings ESP
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here as elaborated below.
Enphase Energy has an Earnings ESP of -8.33% and a Zacks Rank #3, currently. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter
.
Upcoming Solar Releases
SunPower
SPWR
sports a Zacks Rank of 1 at present and is scheduled to post third-quarter 2020 results on Oct 28.
Sunnova Energy
NOVA
carries a Zacks Rank of 3 at present and is scheduled to post third-quarter 2020 results on Oct 29. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
First Solar
FSLR
currently has a Zacks Rank #3 and is set to release third-quarter 2020 results on Oct 27.
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