Investors Heavily Search Enphase Energy, Inc. (ENPH): Here is What You Need to Know

Enphase Energy (ENPH) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Over the past month, shares of this solar technology company have returned +14.9%, compared to the Zacks S&P 500 composite's +1.3% change. During this period, the Zacks Solar industry, which Enphase Energy falls in, has gained 7.7%. The key question now is: What could be the stock's future direction?Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.For the current quarter, Enphase Energy is expected to post earnings of $0.75 per share, indicating a change of +38.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +8.8% over the last 30 days.The consensus earnings estimate of $2.21 for the current fiscal year indicates a year-over-year change of -49.9%. This estimate has changed +3.7% over the last 30 days.For the next fiscal year, the consensus earnings estimate of $3.72 indicates a change of +68.4% from what Enphase Energy is expected to report a year ago. Over the past month, the estimate has changed +0.3%.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for Enphase Energy.The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSProjected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.For Enphase Energy, the consensus sales estimate for the current quarter of $376.7 million indicates a year-over-year change of +24.5%. For the current and next fiscal years, $1.33 billion and $1.7 billion estimates indicate -42.1% and +27.7% changes, respectively.Last Reported Results and Surprise HistoryEnphase Energy reported revenues of $380.87 million in the last reported quarter, representing a year-over-year change of -30.9%. EPS of $0.65 for the same period compares with $1.02 a year ago.Compared to the Zacks Consensus Estimate of $391 million, the reported revenues represent a surprise of -2.59%. The EPS surprise was -16.67%.The company could not beat consensus EPS estimates in any of the last four quarters. The company could not beat consensus revenue estimates in any of the last four quarters.ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Enphase Energy is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Enphase Energy. However, its Zacks Rank #5 does suggest that it may underperform the broader market in the near term.Free Report: 5 Clean Energy Stocks with Massive UpsideEnergy is the backbone of our economy. It’s a multi-trillion dollar industry that has created some of the world’s largest and most profitable companies.Now state-of-the-art technology is paving the way for clean energy sources to overtake “old-fashioned” fossil fuels. Trillions of dollars are already pouring into clean energy initiatives, from solar power to hydrogen fuel cells.Emerging leaders from this space could be some of the most exciting stocks in your portfolio.Download Nuclear to Solar: 5 Stocks Powering the Future to see Zacks’ top picks free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Enphase Energy, Inc. (ENPH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks