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Enphase Energy (ENPH) Exceeds Market Returns: Some Facts to Consider

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In the latest trading session, Enphase Energy (ENPH - Free Report) closed at $111.49, marking a +1.44% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.13%. Meanwhile, the Dow gained 0.55%, and the Nasdaq, a tech-heavy index, lost 0.52%.

The solar technology company's stock has dropped by 5.57% in the past month, falling short of the Oils-Energy sector's loss of 2.9% and the S&P 500's gain of 3.67%.

The investment community will be paying close attention to the earnings performance of Enphase Energy in its upcoming release. It is anticipated that the company will report an EPS of $0.77, marking a 24.51% fall compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $394.17 million, indicating a 28.47% decline compared to the corresponding quarter of the prior year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.54 per share and revenue of $1.41 billion. These totals would mark changes of -42.4% and -38.53%, respectively, from last year.

Any recent changes to analyst estimates for Enphase Energy should also be noted by investors. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 3.32% downward. Enphase Energy is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Enphase Energy is holding a Forward P/E ratio of 43.26. Its industry sports an average Forward P/E of 16.82, so one might conclude that Enphase Energy is trading at a premium comparatively.

Meanwhile, ENPH's PEG ratio is currently 2.73. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Solar industry had an average PEG ratio of 1.85.

The Solar industry is part of the Oils-Energy sector. Currently, this industry holds a Zacks Industry Rank of 173, positioning it in the bottom 32% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.


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