Enphase Energy, a leading provider of solar microinverters and battery energy storage, announced record revenues in Q2 2022, beating expectations and quickly sending the company’s stock up 10% in after-hours trading.
The consensus for Enphase was $508 million in revenues and 85 cents per share. The Fremont, California-based company beat these numbers handily, posting 102% earnings per share growth at $1.07, and revenue growth of 67% with $530 million in revenues posted.
The growth was heavily influenced by rapid expansion in the European market, with second quarter growth of 69%. It was also supported by strong performance in the US market and the success of its IQ8 microinverter, which ROTH Capital Partners said has a 15% premium over the previous IQ7 model.
As of the end of 2021, Enphase has shipped 43.4 TWh of microinverters, representing over 42 million microinverter units, deployed across nearly 2 million solar projects. That number continues to grow, supported by strong interest in the IQ8 inverter, which can form a microgrid with a home solar array and no energy storage.
The IQ8 is a novel technology for its ability to keep the power running during a grid blackout without the need for energy storage or a generator. The device can react to real-time usage in the home and adjust accordingly. The system will feed as much electricity as it has access to based upon sunlight available and solar power capacity, and it will adjust on the fly. When too much energy from the house is being pulled – more than sunlight and installed capacity could provide – the whole system shuts down, only to instantly restart when the excess load is removed. This feature may be increasingly popular as power outages continue to rise, particularly across the western United States.
Looking ahead, the company issued very upbeat guidance for Q3 revenues, expecting between $590 million to $630 million. Enphase’s microinverter sales are expected to continue to bring the lion’s share of revenues in the near term.
Its energy storage segment lags some expectations as it said it estimates it will ship 130 to 145 MWh of battery energy storage in Q3 2022, slightly lower than ROTH’s previous estimate of 156 MWh. The company also operates in the EV charging segment and shipped 8,250 ClipperCreek/Enphase chargers to US customers. It said it expects healthy growth in this segment.
ROTH reissued its buy rating on the stock following the quarterly call and raised its 12-month price target from $270 to $310.
ROTH said factors that may slow Enphase on the progress towards its price target include lower than expected PV demand, unexpected decrease in inverter pricing or gross margins, a lack of available project financing for residential and commercial PV projects, or the accelerated adoption of competitive technologies like DC power optimizers.
The firm said Enphase trades at an elevated valuation due to its unique position as the globally dominant microinverter provider, with close to 100% market share of microinverters.
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