Sign InSummary
On August 22, 2023, Enphase Energy, Inc. (ENPH) closed at $128.32 with a 1.41% decrease, but despite this drop, experts recommend a 'buy' consensus for ENPH due to its strong upside potential, undervalued status, and positive news surrounding the company.
Fundamental Analysis
Enphase Energy, Inc. (ENPH), as reported on the NASDAQ, closed at $128.32 on August 22, 2023, which marked a 1.41% decrease. This downward move was against the general trend for the company, which reported a market cap of $17.50 billion, signifying a significant position in the market.
Despite the recent drop, experts recommend a general 'buy' consensus for ENPH, with 20 advocates for a 'buy' position versus four who hold a neutral 'hold' position. The stock currently lacks any 'strong buy', 'sell', or 'strong sell' recommendations. Notably, the median and consensus target prices are $265 and $268.23, respectively, indicating a strong upside potential from the last close.
ENPH has displayed a steady downward price trend, with its last recorded price of $128.32 being the lowest within an annual range of $127.34 to $339.92. The 50-day moving average is $161.27, and the 200-day moving average is $212.49, both substantially higher than the current price. These figures suggest that the stock might be currently undervalued.
The company reports an earnings-per-share (EPS) of $3.9 and a Price to Earnings ratio (PE) of 32.9. These figures are relatively healthy, indicating that the company has a good profits foundation. This is a positive sign for investors.
Relevant news suggests that ENPH has attracted the attention of Bridgewater Associates, a hedge fund managed by billionaire investor Ray Dalio. Additionally, ENPH is listed as a stock to watch amid increased solar installation activities, and it's noted as a game-changing solar stock. These news items indicate a positive outlook for ENPH.
Technical Analysis
On the technical front, ENPH hasn't shown a supportive level recently. The Relative Strength Index (RSI) of 25 suggests that the stock is currently oversold. This deduction is also backed by a negative 3-month Moving Average Convergence Divergence (MACD) of -18.68, emphasizing the bearish sentiment around the stock.
However, the resistance level is at $135.45, and the stock's trading levels are nearing the bottom end of its 52-week range. When combined with a high Average True Range (ATR) at 4.44, this suggests that there might be a potential turnaround for the stock, bearing the characteristics of an undervalued stock that's due for a reversal.
Predictions
The discounted cash flow (DCF) data values ENPH at $131.60, a slight gain from its last close. Nonetheless, considering the volatile nature around the stock, the price prediction for the next trading day, August 23, 2023, would be a tight call, often varying within the recent ATR, making it anywhere between $124 - $132.
Given the technical and fundamental pointers, as well as the market sentiment, the stock might see a significant upwards correction during the upcoming week, potentially moving towards the recent resistance of $135.45.
Evaluation
As per a detailed analysis of ENPH's fundamentals and technicals, the stock is currently undervalued relative to its projected targets. Thus, it seems to be a favorable 'Buy'. However, since the stock is trading near its 52-week low and seeing some volatility, investors must tread with caution. Therefore, the final categorization is a 'Buy', given its strong future growth prospects, but with a caveat to monitor closely due to its current bearish short-term trend.
