What occurred
The inventory of photo voltaic system know-how firm Enphase Power (NASDAQ:ENPH) had a robust month in February. Two separate catalysts had been actually chargeable for the positive aspects, leading to an general soar of 18.7% for the month, based on knowledge from S&P World Market Intelligence.
So what
First, the corporate reported its fourth-quarter and full-year 2021 outcomes on Feb. 8, prompting an enormous single-day pop within the inventory. The second catalyst wasn’t company-specific. Many photo voltaic and different alternative-energy shares have soared within the remaining days of February as oil costs jumped on the backdrop of conflict in Ukraine and geopolitical uncertainty.
Picture supply: Getty Pictures.
Now what
After having given up some positive aspects made after its sturdy earnings report, shares of Enphase soared virtually 32% within the final 5 days of the month. However the earnings report additionally gave the inventory a single day double-digit enhance as issues over potential provide chain issues had been confirmed overly pessimistic.
Enphase reported report income of $412.7 million for its fourth quarter, bringing full 12 months 2021 income to $1.38 billion, leaping practically 80% over the 2020 whole of $774.4 million. After producing $92.7 million in money movement from operations, and spending $300 million in share repurchases in December, Enphase additionally ended the 12 months with $1 billion in money on its steadiness sheet.
The quarter was profitable because of continued sturdy demand together with execution by the corporate. With supply-chain constraints nonetheless in focus for a lot of companies, Enphase CEO Badri Kothandaraman addressed that scenario within the firm’s earnings name with traders, saying, “Our scenario has been secure primarily on account of diligent provider administration and qualification of alternate suppliers throughout the previous 12 months.”
The corporate expects income to proceed to extend within the first quarter of 2022, with it anticipating a spread of $420 million to $440 million. With oil costs hovering over $100 per barrel, many traders count on investments in renewable sources to stay sturdy, serving to to drive that income progress.
For traders, the primary concern with Enphase ought to be its valuation. At its current market cap of $21.2 billion, shares are buying and selling at a price-to-earnings (P/E) ratio of virtually 150. Whereas continued sturdy progress ought to carry that down over the following a number of years, it is an funding that comes with loads of threat ought to there be any stumbles within the firm’s progress price.
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