by Ian Harvey
August 01, 2019
Enphase Energy (NASDAQ: ENPH)
After Enphase Energy earnings were reported yesterday, shares rose as much as 33.6% due to an impressive second-quarter 2019 operating results.
And, “Cut-to-the-Chase” Members were able to make 325% potential profit on the deal from Enphase Energy earnings!
Read the original recommendation here.
Enphase Energy reported earnings with adjusted earnings of 18 cents per share, which surpassed the Consensus Estimate of 13 cents by 38.5%. The bottom line also improved from a penny reported in the prior-year quarter.
Barring one-time adjustments, the company posted GAAP earnings of 8 cents per share against a loss of 4 cents in the year-ago quarter.
Also, Enphase Energy's revenues of $134.1 million in the second quarter surpassed the Consensus Estimate of $121 million by 10.8%. The top line also surged 76.7% from the year-ago quarter's $75.9 million on solid shipments.
YOU NEED TO BE IN TO PROFIT!
Understanding Enphase Energy…..
Enphase isn't exactly a front-line name in the solar industry. Enphase, together with its subsidiaries, designs, develops, and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. The microinverters it makes are just one, albeit extremely vital, part of the final product. However, as one of the largest suppliers of microinverters in the world, it plays a big role in the solar panel space.
Early in its life, Enphase grew quickly but lacked financial and operational discipline. It hit a wall in 2016 and had to step back to focus on more than just the technology. That included bringing in a new CEO, as well as becoming more disciplined on the sales and production sides of the business.
With a new emphasis on profitability, the company turned in a strong 2018. Revenue advanced 10%, and adjusted earnings went from a loss of $0.25 a share in 2017 to a profit of $0.10 a share in 2018 (driven largely by a strong fourth quarter). That upturn continued into the first quarter of 2019: A revenue advance of 8.5% year over year, combined with improved margins, led to a 100% increase in adjusted earnings.
A NICE POTENTIAL PROFIT TO START THE WEEK!
During Enphase Energy earnings report management reported that it expects the business to perform even better in the third quarter of 2019. It projects revenue will settle in the neighborhood of $175 million at the midpoint (more than first-half 2018 revenue) and expects a gross margin of 34.5% at the midpoint. Also stated, from the Enphase Energy earnings report, that operating expenses are expected to rise to around $29.5 million to make the most of growth opportunities, but that would still leave plenty of room for operating income to keep trekking higher.
Consider this fact…..
Despite soaring premium shares, and while the stock could give up some of its gains, there aren't many places in the stock market to find profitable growth on the order of magnitude being delivered by the business.
That suggests from the Enphase Energy earnings report that it will at least grow into its current premium, perhaps sooner than expected.
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
This leads to upgrades…..
Wall Street price targets are surging higher as well, with Oppenheimer now valuing Enphase at $26 a share, Roth Capital saying $30, and Craig-Hallum raising its price target to $31.
On top of all that, investment banker H.C. Wainwright more than doubled its price target (to $36) and upgraded Enphase stock to buy.
Oppenheimer responded to Enphase Energy earnings as"a strong" performance by doubling its price target. Roth liked the company's chances of producing "even stronger" results in Q3, and Craig-Hallum was impressed by the margin that Enphase exceeded estimates.
As for Wainwright, the analyst that actually upgraded the stock on the earnings day -- was already pretty optimistic about the company despite its previous neutral rating. The analyst's prior revenue target of $492.4 million for Enphase this year exceeded Street estimates, and now Wainwright is hiking its target even further, saying the company could conceivably do close to $614 million in sales. And "in 2020 and beyond," Wainwright has "expectations of stronger growth" for Enphase.
Profits-wise, Q2 was the third quarter in a row that Enphase delivered positive earnings -- after three straight years of losses. Now, with growth racing higher, Wainwright further expresses his opinion, "expectations of consistent profitability in forward periods" -- enough profit to convince the analyst to more than double its price target to what is now the highest estimate on Wall Street: $36.
PATIENCE PAYS OFF!
What you can do about this situation!…..
Based on the information available there is at least a possibility it is not too late to buy Enphase, even after its astonishing leap in share price.
Up until yesterday, most analysts agreed that 2019 would be a profitable year for Enphase, with GAAP profits perhaps approaching $0.54 per share.
Q2's strong results and Enphase's optimistic guidance for Q3, however, raise the possibility that Enphase could do even better than Wall Street is expecting this year, and in future years as well.
Analysts are predicting Enphase could earn as much as $1.62 per share by 2023, tripling 2019 earnings in the space of just four years.
If Enphase keeps growing the way it's going, the company could well earn everything analysts are predicting for it -- and more.
Consider this options trade…..
Buy the ENPH JAN 17 2020 30.000 CALL at approximately $4.00.
If you not a member and interested in being part of this profitable action just CLICK HERE.
AS ALWAYS THE DECISION IS YOURS!
OR other memberships.....
.....Mentorship Membership …….CLICK HERE......
....."Earnings Predictions" just click here……
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!