Enphase Energy 5 Year Growth

NASDAQ: ENPH Current Share Price (as of 4/16): $150.01 5 year price target Low: $255.62; ROI: 70.4% High: $277.21; ROI: 84.8% Thesis I: Natural Disasters Highlight ENPH’s Importance Competition: Tesla has created more than 100 megawatts of energy storage 40 miles outside of Houston Uniqueness: Enphase’s technology is more focused on the needs of individual homeowners  Plenty of room for growth in this space regardless of the competition in utility-level/large scale battery storage space Grid-agnostic technology - IQ 8 Opportunity: Enphase’s micro inverter technology stands to grow from the exposure provided by the grid failure Texas Attorney General’s office investigations into Texas Electrical Companies Consumers are losing faith in current companies New opportunity for competitors to enter the energy market In times of disaster, the price of electricity shot up from $18 to $300 per megawatt hour Natural gas went up as much as 4000% Enphase experienced a drop in stock prices that corresponds with the grid failures in Texas. Since this drop, the stock has been able to regain some of its value, but it has not been able to completely regain its original value. This has been an overreaction on the part of the market due to increasing distrust in energy sources. The rising yield rates coupled with the power outages in Texas created a scenario in which the stock prices for enphase were being unrealistically decreased. Thesis 2: Unprecedented, Favorable Political Environment Favorable Policy Desires from President Biden as well as Political Consensus for Renewable Energy foreshadow an incredibly advantageous environment for ENPH’s growth and wider integration in our near future post-Covid. President Biden has included a 10-year extension for the ITC as well as the PTC for both clean power generation and energy storage within his recent $2 trillion infrastructure plan  Which ultimately implies  ENPH will see an assured growth in investment as well as production  Furthermore, this plan cuts electricity bills and carbon emissions related to power generation Which should in effect lower ENPH costs  Public Signaling via Biden’s view for Federal gov’t buildings Biden mandating federal gov’t building to procure clean power for all of their supply needs 24/7 This necessitates energy storage and sets the best example for how the process is feasible and better for households/buildings and energy consumption  across the nation  Politically there is consensus that renewable energy is necessary and desired despite different reasons Democrats prioritize curbing climate change, while Republicans are more motivated by reducing energy costs. Nevertheless, both are achieved via Biden’s vision and with ENPH integration Increased consideration as a way to rebuild and stimulate the economy as well as increased necessity to strengthen infrastructure due to Covid collapse Thesis 3: Enphase’s Superior Technology Microinverters, release of the IQ 8, new battery storage technology Enphase is overwhelmingly dominant in the space of microinverters and this approach easily beats out competitors in terms of technological superiority Three approaches: string inverters, string inverters with power optimizers, and Micro inverters  Micro inverters are technologically superior and current trends have already proven them to be the best solution: Durability - only one to have a 25 year warranty The technology is very scalable and upgrading is easy - this allows consumers to gain exposure to solar energy while not having to worry about being able to accurately assess their energy needs both now and in the future Mass adoption of electric vehicles will precipitate a spike in consumers needing to install new solar panels Pandemic proves energy consumption can be unpredictable Safety concerns raised over home fires have pushed regulators in Australia and the US to favor micro inverters The IQ 8 micro inverter is a game changer for off-grid solar systems Allows for homes to maintain some power in the event of a grid-wide shutdown Traditional off-grid solar systems that have batteries are expensive and reduce margin of profit substantially Release of the Encharge battery storage systems Expansion of product offering brings greater diversification At full charge both battery and full PV capabilities are at your disposal Expansion of partnerships with different solar installers (Sunnova - one of the largest solar providers, Momentum Solar - an Inc. 500 fastest growing private company, Solar Optimum - targeting Southern California, etc.) Expansion of digital offerings and tools via Sofdesk acquisition and acquisition of DIN’s Design Services Business will accelerate expansion of the Enphase Installer Network (EIN) In 2020, the EIN was expanded to Australia and, this month, it was expanded into Europe Conclusion: Enphase Energy is a strong growth investment opportunity within the solar PV space and is poised to offer substantial returns in the long run:  Recent events in Texas and the continuation of natural disasters in other parts of the world open up a unique opportunity for battery storage to surge in popularity due to its independence from the grid and durability to continue providing electricity to homes in the case of disasters and grid failures The current administration’s push for historic renewable energy investment bodes well for Enphase’s long term prospects - especially as Congress finally reaches consensus on the extension of the investment tax credit to battery storage technology In addition, Enphase is poised to take an increasing piece of the pie as the pie continues to grow due to its superior technology and consistent evolution of its business

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Enphase Energy 5 Year Growth

Apr 21, 2021

bullish

general Analysis

[4 min Read]

blog post cover photo

NASDAQ: ENPH

Current Share Price (as of 4/16): $150.01

5 year price target

  • Low: $255.62; ROI: 70.4%
  • High: $277.21; ROI: 84.8%

Thesis I: Natural Disasters Highlight ENPH's Importance

Competition:

  • Tesla has created more than 100 megawatts of energy storage 40 miles outside of Houston

Uniqueness:

  • Enphase's technology is more focused on the needs of individual homeowners
    • Plenty of room for growth in this space regardless of the competition in utility-level/large scale battery storage space
  • Grid-agnostic technology - IQ 8

Opportunity:

  • Enphase's micro inverter technology stands to grow from the exposure provided by the grid failure
  • Texas Attorney General's office investigations into Texas Electrical Companies
    • Consumers are losing faith in current companies
    • New opportunity for competitors to enter the energy market
  • In times of disaster, the price of electricity shot up from $18 to $300 per megawatt hour
    • Natural gas went up as much as 4000%

Enphase experienced a drop in stock prices that corresponds with the grid failures in Texas. Since this drop, the stock has been able to regain some of its value, but it has not been able to completely regain its original value. This has been an overreaction on the part of the market due to increasing distrust in energy sources. The rising yield rates coupled with the power outages in Texas created a scenario in which the stock prices for enphase were being unrealistically decreased.

Thesis 2: Unprecedented, Favorable Political Environment

Favorable Policy Desires from President Biden as well as Political Consensus for Renewable Energy foreshadow an incredibly advantageous environment for ENPH's growth and wider integration in our near future post-Covid.

  • President Biden has included a 10-year extension for the ITC as well as the PTC for both clean power generation and energy storage within his recent $2 trillion infrastructure plan
    • Which ultimately implies ENPH will see an assured growth in investment as well as production
  • Furthermore, this plan cuts electricity bills and carbon emissions related to power generation
    • Which should in effect lower ENPH costs
  • Public Signaling via Biden's view for Federal gov't buildings
    • Biden mandating federal gov't building to procure clean power for all of their supply needs 24/7
    • This necessitates energy storage and sets the best example for how the process is feasible and better for households/buildings and energy consumption across the nation
  • Politically there is consensus that renewable energy is necessary and desired despite different reasons
    • Democrats prioritize curbing climate change, while Republicans are more motivated by reducing energy costs. Nevertheless, both are achieved via Biden's vision and with ENPH integration
    • Increased consideration as a way to rebuild and stimulate the economy as well as increased necessity to strengthen infrastructure due to Covid collapse

Thesis 3: Enphase's Superior Technology

Microinverters, release of the IQ 8, new battery storage technology

Enphase is overwhelmingly dominant in the space of microinverters and this approach easily beats out competitors in terms of technological superiority

  • Three approaches: string inverters, string inverters with power optimizers, and Micro inverters
  • Micro inverters are technologically superior and current trends have already proven them to be the best solution:
    • Durability - only one to have a 25 year warranty
    • The technology is very scalable and upgrading is easy - this allows consumers to gain exposure to solar energy while not having to worry about being able to accurately assess their energy needs both now and in the future
      • Mass adoption of electric vehicles will precipitate a spike in consumers needing to install new solar panels
      • Pandemic proves energy consumption can be unpredictable
    • Safety concerns raised over home fires have pushed regulators in Australia and the US to favor micro inverters

The IQ 8 micro inverter is a game changer for off-grid solar systems

  • Allows for homes to maintain some power in the event of a grid-wide shutdown
  • Traditional off-grid solar systems that have batteries are expensive and reduce margin of profit substantially

Release of the Encharge battery storage systems

  • Expansion of product offering brings greater diversification
  • At full charge both battery and full PV capabilities are at your disposal
  • Expansion of partnerships with different solar installers (Sunnova - one of the largest solar providers, Momentum Solar - an Inc. 500 fastest growing private company, Solar Optimum - targeting Southern California, etc.)

Expansion of digital offerings and tools via Sofdesk acquisition and acquisition of DIN's Design Services Business will accelerate expansion of the Enphase Installer Network (EIN)

  • In 2020, the EIN was expanded to Australia and, this month, it was expanded into Europe

Conclusion:

Enphase Energy is a strong growth investment opportunity within the solar PV space and is poised to offer substantial returns in the long run:

  1. Recent events in Texas and the continuation of natural disasters in other parts of the world open up a unique opportunity for battery storage to surge in popularity due to its independence from the grid and durability to continue providing electricity to homes in the case of disasters and grid failures
  2. The current administration's push for historic renewable energy investment bodes well for Enphase's long term prospects - especially as Congress finally reaches consensus on the extension of the investment tax credit to battery storage technology
  3. In addition, Enphase is poised to take an increasing piece of the pie as the pie continues to grow due to its superior technology and consistent evolution of its business
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ENPH

Enphase Energy, Inc.

198.25

-0.14
-0.07%

Return

34.86%
Change % Since Posting
51.25
Change Since Posting
147.00
Price When Posted

Metrics

255.62
Target Price
8/ 10
Confidence
3+ Years
Timeframe
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