The Cleantech industry includes, but is not limited to, solar and wind energy, biomass energy and hydropower. According to NASA, the planet’s average surface temperature has risen about 2.05 degrees Fahrenheit since the late 19th century. The world is more worried than ever about climate change and is pinning its hope on a sustainable future driven by renewable energy. Investor optimism over the prospects of the industry is clearly evident from…
the Invesco Cleantech ETF’s (PZD) 27.5% year-to-date return, versus the S&P 500’s 8.6% gain.
Internationally, the concern over climate change has led countries to endorsing some sort of climate deal, with China pledging to reach net zero emissions by 2060, and the European Green Deal aiming to transform the 27-country bloc to a low-carbon economy. In the United States, president-elect Joe Biden had announced a $2 trillion plan in August to increase the use of clean energy. His plan is aimed at ensuring that the United States achieves a 100% clean energy economy and reaches net-zero emissions by 2050.
The new Presidential regime is expected to provide a boost to cleantech stocks. Enphase Energy, Inc. (ENPH), First Solar, Inc. (FSLR), and Renewable Energy Group, Inc. (REGI) stands to directly benefit from this trend.
Enphase Energy, Inc. (ENPH)
With over 30 million inverters shipped and operating in more than 21 countries, ENPH is the world’s leading supplier of solar microinverters. The California-based company provides semiconductor-based microinverter, AC battery storage systems, envoy communications gateway, and enlighten cloud-based monitoring service among others. Interestingly, through the Enphase University, the company offers online and in-person training resources for solar and storage installers.
In its recently reported quarterly financial results (for the third quarter ending September 2020), ENPH’s net revenues increased 42.19% sequentially to $178.5 million. Gross profit margin increased to 41% for the quarter. The company’s EPS increased 76.5% sequentially to $0.30, surpassing the consensus estimate by 25%. Also, ENPH’s earnings surprise history looks impressive with the company beating consensus EPS estimates in each of the trailing four quarters.
Analysts expect ENPH’s revenue to increase 21.5% for the quarter ending December 2020 and 61.7% next year. The company’s EPS is expected to increase 34.7% this year, 44.5% next year, and at a rate of 36.6% per annum over the next five years. On a year-to-date basis, ENPH has rallied 368.9% to close yesterday’s session at $122.53. Over the past six months, ENPH soared 132.6%.
Last month, ENPH announced that together with SunCool Energy, the company has started offering the Enphase Encharge storage system to customers in South Florida. Natura Living, one of Thailand’s leading residential and commercial solar installers, also joined forces with the company to provide its microinverter-based systems for the commercial solar installation projects for PepsiCo (PEP) Thailand.
How does ENPH stack up for the POWR Ratings?
B for Trade Grade
B for Peer Grade
B for Overall POWR Rating
The stock is also ranked #1 out of 16 stocks in the Solar industry.
First Solar, Inc. (FSLR)
Founded in 1999, FSLR is a leading global provider of photovoltaic (PV) solar energy solutions. Based in Arizona, the company operates through two segments – components and systems. Having a strong balance sheet, the company invests heavily in Research and Development (R&D).
FSLR’s net sales for the third quarter that…
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