It has been about a month since the last earnings report for Enphase Energy (ENPH Quick QuoteENPH - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Enphase Energy due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Enphase Energy Q1 Earnings Beat, Revenues Rise Y/Y

Enphase Energy reported first-quarter 2020 adjusted earnings of 38 cents per share, which surpassed the Zacks Consensus Estimate of 32 cents by 18.8%. The bottom line also surged a massive 375% from 8 cents reported in the prior-year quarter.

Including one-time adjustments, the company posted GAAP earnings of 50 cents per share compared with 2 cents in the year-ago quarter.

The year-over-year uptick can be attributed to solid revenues and operating income growth in the first quarter.

Revenues

Enphase Energy’s first-quarter revenues of $205.5 million beat the Zacks Consensus Estimate of $204 million by 0.7%. The top line soared 105.2% from the year-ago quarter’s $100.2 million, driven by solid shipments. Quarterly revenues came within the guided range of $200-$210 million.

Operational Highlights

Enphase Energy’s total shipments during the reported quarter amounted to approximately 643 megawatts DC or 2,012,476microinverters.

Gross profit totaled $80.7 million, soaring 142% from $33.3 million a year ago.

Total operating expenses increased 37.2% year over year to $36 million. This can be attributed to higher research and development, sales and marketing, as well as general and administrative expenses.

Operating income during the quarter totaled $44.7 million compared with $7.1 million in the year-ago quarter.

Financial Performance

Enphase Energy had $549.1 million of cash and cash equivalents, as of Mar 31, 2020, up from $251.4 million at the end of 2019.

Cash flow from operating activities amounted to $39.2 million in first-quarter 2020 compared with $17.06 million in the year-ago period.

Long-term debt was $295.2 million at the end of the first quarter compared with $102.7 million as of Dec 31, 2019.

Q2 Guidance

For second-quarter 2020, Enphase Energy expects revenues of $115-$130 million. The Zacks Consensus Estimate for the same is pegged at $161.7 million, higher than the guided range.

Adjusted operating expenses are expected between $25.5 million and $27.5 million, excluding approximately $7.5 million estimated for stock-based compensation expenses, acquisition-related expenses and amortization.

Adjusted gross margin is likely to be in the range of 37-40%.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted -35.56% due to these changes.

VGM Scores

At this time, Enphase Energy has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Enphase Energy has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.