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Success in Europe Bolsters the Bull Case for Enphase Energy

Enphase Energy (ENPH) is making strides in offering its battery-storage solutions domestically.
At the same time, the company’s improving business abroad…

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This article was originally published by Investor Place
  • Enphase Energy (ENPH) is making strides in offering its battery-storage solutions domestically.
  • At the same time, the company’s improving business abroad could prove to be a major revenue generator.
  • Investors should consider adding Enphase Energy shares to their ESG-friendly portfolio.

Source: IgorGolovniov / Shutterstock.com

California-based solar energy company Enphase Energy (NASDAQ:ENPH) has a sizable market footprint in the U.S. However, it’s the company’s international operations that could push ENPH stock to new heights this year.

In the 2020s, businesses with an ESG (environmental, social and governance) angle are red-hot. Yet, Enphase Energy isn’t just hopping on a trend, as the company has been a premier solar inverter provider for years.

As an early mover in this industry, Enphase Energy is poised to benefit from the developed world’s push to wean itself off of Russian-supplied fossil fuels. As we’ll see, the company is in rapid expansion mode, not only domestically, but in nations abroad with strong demand for energy today.

ENPH
Enphase Energy, Inc.
$157.22

What’s Happening With ENPH Stock?

After pulling back from a 52-week high of $282.46, ENPH stock is trading at a discount now. Really, anything below $175 is a gift that shouldn’t be turned down.

What factors could propel the Enphase Energy share price higher in 2022 and beyond? For one thing, the company is working diligently to sell its battery storage products in the U.S.

Specifically, Enphase Energy observed “growing deployments” of the company’s micro-inverters and battery storage systems in the states of Georgia and Missouri. In light of severe weather conditions, the company emphasized sales of Enphase Energy Systems powered by IQ Microinverters and IQ Batteries in those particular U.S. states.

As the company points out, Enphase “delivers a safer solar-plus-battery solution that does not expose installers or homeowners to high-voltage direct current (DC).” In other words, customers in Georgia, Missouri and elsewhere can count on Enphase Energy to deliver efficient solar solutions with an enhanced safety profile.

Making Strong Progress

Oppenheimer analyst Colin Rusch is evidently bullish on ENPH stock. However, this isn’t solely due to Enphase’s progress in the U.S.

Rusch observed that Enphase Energy is “making strong progress” in the E.U. This appears to be driven by increasing demand for solar/battery technology as Russia threatens to cut off fossil fuel supplies.

Envisioning “potential for accelerating top-line growth and margin expansion,” Rusch assigned ENPH stock an “outperform” rating. Along with that, the analyst assigned a lofty $307 price target to the stock.

Knowing this, we can put Enphase’s first-quarter 2022 financial results in context. For one thing, the bulls can celebrate Enphase Energy’s record quarterly revenue of $441.3 million, which was up 7% year-over-year.

They can also observe that Enphase finished Q1 2022 with $1.1 billion in cash, cash equivalents and marketable securities. In other words, the company remains in a solid capital position.

The headline news, however, involves Enphase’s business in the E.U. According to Barron’s, CEO Badri Kothandaraman said that Enphase Energy “expects to grow sales by 40% in Europe in the current quarter over its first-quarter numbers.”

That’s a powerful projection, to say the least. It points to Enphase’s expansive vision for Europe, where the demand for fossil-fuel alternatives is intense.

What You Can Do Now

As we’ve discovered, Enphase Energy is truly an international business. The company is clearing the way for market-footprint expansion in the U.S. and abroad.

Meanwhile, the demand for solar inverters could increase as nations seek alternatives to Russian fossil fuels. In this context, the bullish thesis for ENPH stock is powerful and investors are invited to consider a long position.

On the date of publication, Louis Navellier had a long position in ENPH.  Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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