Enphase Energy Inc
Enphase Energy Inc
ENPH
0.33%
3%
- Shares currently trade near their 21-day exponential moving average
- It's key to see if stock can rebound off 21-day line and form new base
- Company has perfect Composite Rating of 99; Relative Strength is 98
Industry Group Ranking
Emerging Pattern
Pullback
A stock may pull back after a breakout, often to the 50-day line. A rebound from the first or second visit to the 50-day can be a buying opportunity, especially for existing holders to add some shares.
Enphase Energy (ENPH) is the IBD Stock Of The Day. It's one of several solar energy stocks investors are piling into thanks to the recently approved Inflation Reduction Act, which authorizes $369 billion in spending on green energy. ENPH stock has been trading at higher levels for several weeks now.
XThe Fremont, Calif.-based company is a leading provider of solar microinverters. Microinverters boost solar energy production, improve reliability in solar energy systems and support intelligent energy management.
Enphase also makes software to monitor energy generation and battery systems. The company focuses primarily on residential markets.
After a period of volatility in June and July, Enphase stock currently trades near its 21-day exponential moving average. It's key to see if it can rebound powerfully from the 21-day line and forge a new base.
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The 21-day exponential moving average places a greater weight and significance on the most recent data points. It's a preferred choice when it comes to short-term swing trading. The 50-day moving average is better suited for identifying medium-term direction.
Enphase Stock: Delivering Clean Energy Solutions
Enphase says its mission is delivering technology solutions that make clean energy affordable, reliable and readily accessible. The company's competitors include Israel-based SolarEdge Technologies (SEDG).
Enphase reported second-quarter earnings on July 27 that caused ENPH stock to vault 18%. Earnings per share soared 102% to $1.07, well ahead of Wall Street predictions for 85 cents. Revenue jumped 67% to $530 million, beating estimates of $508 million.
For the third quarter, Enphase expects revenue in the range of $590 million to $630 million — or $610 million at the midpoint. That exceeded analyst forecasts by 11%.
ENPH stock was down for much of the trading on the stock market today, but shares edged into positive ground by the close. The stock ended the day up a fraction to 285.77.
"As I have stated before, our strategy is to build best-in-class home energy systems and deliver them to homeowners through our network of distributors and installers, enabled by our installer platforms," Enphase Chief Executive Badri Kothandaraman said in the company's earnings call with analysts. "We have certified more than 1,600 installers worldwide to date, and we are continuing to win around 15 new installers a week in the U.S."
Strong IBD Composite Rating
At the end of the first quarter, ENPH announced it will start offering electric-vehicle chargers through its solar installers. It also hopes to be manufacturing its own EV chargers by the end of 2022.
Enphase stock is on the IBD 50 list of growth stocks to buy and watch. Also, Enphase holds the No. 2 rank among its peers in IBD's Energy-Solar industry group. Daqo New Energy (DQ) is first. Canadian Solar (CSIQ) is third, followed by Jinko Solar (JKS).
The sector ranks No. 1 of the 197 industry groups tracked by IBD.
According to IBD Stock Checkup, ENPH stock has a perfect IBD Composite Rating of 99. IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
In addition, its Relative Strength Rating stands at 98. That means ENPH stock has outperformed 98% of all stocks over the past 12 months. Investors should key in on ratings of 80 or better.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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