Is Enphase Energy Ready to Breakout?

Enphase Energy Inc. (ENPH) delivers energy management technology for the solar industry. The company designs, develops, manufactures and sells home energy solutions that connect solar generation, energy storage, and management on one intelligent platform…

Enphase Energy Inc. (ENPH) revolutionized the solar industry by creating a semiconductor-based microinverter that converts energy at the individual solar module level. This has led to a strong position for the company in the booming solar microinverter market. Though insufficient tax equity financing could become a problem.

ENPH had $1.5 billion in cash as of the latest quarter compared with only $84 million in short-term debt. The company also has a healthy gross margin of 44.6%. Over the past three years, ENPH has grown sales an average of 42.4% per year. Analysts expected sales to soar 147.7% year over year in the current quarter.

The stock appears very overpriced with a forward P/E of 94.34 and EV/EBITDA of 210.29. ENPH stock saw bullish momentum from July to early 2021, but the stock then trended downward into early May. It has since reversed course and is showing positive momentum as seen in the chart below.

Take a look at the 1-year chart of ENPH below with the added notations…

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