Enphase and SolarEdge On Fire!
19 February 2020
Enphase (ENPHUS) and SolarEdge (SEDG US) are both flying to record high (+35% and +15% respectively) after Enphase reported 4Q earnings beating Street’s expectations.
Yesterday, Enphase reported Q4-2019 revenues of $210mnvs.expectations of $205.3mn and vs. $92.3mnduring the same period last year. The company notably enjoyed from $36.4mn of safe harbor revenues (see previous article for more details).
Enphase is also guiding its Q1-2020 at between $200mn to $210mn, well above Street’s consensus of $172mn.
We think that the “short” report published by Citron Research in September2019, outlining that Generac (GNRC US) entry int he solar inverter market would have negatively impactedEnphase and SolarEdge sales, might play in today’s 35% upside move as some short sellers are likely to cover their positions
As stated in our note at the time, Generacentryinto the US market was a non-event and hasn't stopped Enphase and SolarEdge to pursue their unabated growth. Both companies are still leading the U.S. residential market and benefit from the positive momentum in the solar industry.
New U.S. residential installations are soaring, driven by falling hardware costs, state-mandates requiring new-build homes to integrate solar panels (e.g., in California), as well as people’s growing interest in solar & solar-plus-storage systems in reaction to recent wildfires and Public Safety Power Shutoffs (PSPS).
We remember to our investors that the Solar sector accounts for roughly 25% of our investments into the Sustainable Future certificate.
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