The Enfage (NASDAQ: ENPH) Share prices have generated outstanding returns for investors over the past two years. Since the beginning of 2020, the stock has returned more than 500%. Shares of the green energy company have returned about 60% in the last 12 months.
Investors are buying stocks as green technology and renewable energy drives begin to heat up. Hundreds of billions of pounds have flowed into renewable energy technology in the last 24 months. And the trend is just accelerating.
The desire to build better after the epidemic is forcing investors and consumers to rethink their energy habits. Rising hydrocarbon prices and supply problems are also changing.
Designs and manufactures Enfez software driven home energy solutions. These primarily form solar energy solutions and home energy storage. The company is the world’s leading supplier of microinverter based solar and battery systems.
Simply put, this means that the company’s technology allows consumers to generate solar energy and use it later for home use. Its latest product, which includes “IQ7 microinverter“, Can store 42 kWh of energy. This is enough to supply electricity to most homes for more than a day.
The demand for this renewable technology is increasing. Enfaz has recorded revenue of 6 286 million for 2017. By 2020, that number will reach 4 774 million. For the quarter ended June 2021, revenue totaled 316 million. This suggests that the company is on track to earn 1.2 billion in the next 12 months.
Of course, this could be a conservative statistic whose income is doubling on a year-over-year basis.
The company is rapidly expanding its operations to meet global demand. The company is currently moving to Belgium, which it calls “The fastest growing solar market in Europe.It recently announced expansion to Italy and Brazil.
Enfage share price valuation
Enfage is already profitable, so there is cash available to expand into this new market. In the last quarter of June, it had a net income of about 39 39 million. Based on the current Wall Street growth forecast, the stock has a forward trading price-to-earnings (P / E) of multiple5.
This multiple looks expensive, especially since only the solar market is going to increase competition. Huge amounts of money are flowing into the renewable energy sector and companies are constantly fighting for new business.
Enphase may be leading the market today, but there is no guarantee that it will maintain its market position. There are also questions about the effectiveness of solar compared to other green technologies such as wind and nuclear.
Despite these risks, I am thrilled to see the company’s success and its technology. As the world moves away from hydrocarbon energy, I think demand for its solar products will continue to grow, especially among homeowners. That’s why I’ll buy a speculative position for my portfolio today. Despite its recent performance, I don’t think it’s too late to buy the stock.
Rupert Hargreaves has no position on any of the shares mentioned. Motley Flower UK has no position on any of the shares mentioned. Opinions expressed in the companies mentioned in this article may differ from those of the author and therefore our official recommendations in our subscription services such as Share Advisors, Hidden Winners and Pro. Here at The Motley Flower we believe that considering a variety of insights makes us a better investor.