A month has gone by since the last earnings report for Enphase Energy (ENPH). Shares have added about 11.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Enphase Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Enphase Energy Q4 Earnings Beat Estimates, Sales Rise
Enphase Energy reported fourth-quarter 2021 adjusted earnings of 73 cents per share, which surpassed the Zacks Consensus Estimate of 57 cents by 28.1%. The bottom line improved 43.1% from 51 cents per share reported in the prior-year quarter.
Including one-time adjustments, the company posted GAAP earnings of 37 cents per share, down 26% from 50 cents in the year-ago quarter.
The company reported adjusted earnings per share of $2.41 for full-year 2021, which increased 75.9% from $1.37 reported in 2020 and beat the Zacks Consensus Estimate of $2.27 by 6.2%.
Revenues
Enphase Energy’s fourth-quarter revenues of $412.7 million beat the Zacks Consensus Estimate of $403 million by 2.4%. The top line soared 55.8% from the year-ago quarter’s $264.8 million, driven by strong demand for its microinverter systems.
In full-year 2021, ENPH generated sales worth $1.38 billion and increased a solid 78.5% from the year-ago figure. Full-year sales surpassed the Zacks Consensus Estimate of $1.37 billion by 0.7%.
Operational Highlights
Enphase Energy’s total shipments during the reported quarter amounted to approximately 1,082 megawatts (MW) or 3,033,891 microinverters and 100.2 MW hours of Enphase IQ Batteries.
The company’s adjusted gross margin remained flat at 40.2% compared with the year-ago quarter’s margin.
Adjusted operating expenses escalated by 99.4% year over year to $68.2 million. This was primarily due to additional investment in product launches, R&D and IT infrastructure.
Adjusted operating income during the quarter soared 35.1% to $97.7 million compared with $72.4 million in the year-ago quarter.
Financial Performance
Enphase Energy had $119.3 million of cash and cash equivalents at the end of 2021, down from $679.4 million at the end of 2020.
Cash flow from operating activities amounted to $352 million as of Dec 31, 2021, compared with $216.3 million at the end of the prior year.
Q1 Guidance
For the firstquarter of 2022, ENPH expects revenues in the range of $420-$440 million. The Zacks Consensus Estimate for the same is pegged at $411.1 million, lower than the company’s guided range.
Adjusted operating expenses are expected between $67.5 million and $70.5 million, excluding approximately $63 million estimated for stock-based compensation expenses, and acquisition-related costs and amortization.
Adjusted gross margin is likely to be 38-41%, excluding stock-based compensation expenses.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
The consensus estimate has shifted 19.54% due to these changes.
VGM Scores
Currently, Enphase Energy has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Enphase Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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