10 Best Manufacturing Stocks To Buy According to Analysts

5. Enphase Energy, Inc. (NASDAQ:ENPH)

Number of Hedge Fund Investors  in Q1 2024: 41

Average Analyst Share Price Upside: 22%

Average Analyst Share Price Target: $126.22

Enphase Energy, Inc. (NASDAQ:ENPH) is a solar power company that provides equipment that enables users to capture and store solar energy. This means that it is placed well in a high growth industry that benefits substantially from infrastructure spending. At the same time, since it’s a high growth company, Enphase Energy, Inc. (NASDAQ:ENPH) also needs loose financial conditions to grow. In a high inflation and high interest rate environment, customers find it difficult to finance pricey solar energy products which creates headwinds for the firm. Therefore, the key metrics to watch when trying to determine the price movement of Enphase Energy, Inc. (NASDAQ:ENPH)’s shares is to see its sell through rates, distributor stock, and channel inventory as they enable an analysis of the demand side of the business. At the same time, Enphase Energy, Inc. (NASDAQ:ENPH) might also suffer from growing competition in the industry as more firms pop up to take advantage of the growing consumer interest in solar power.

Enphase Energy, Inc. (NASDAQ:ENPH)’s management commented on the channel inventory during its Q1 2024 earnings call where it shared:

“We expect sell-through demand of our products to be approximately $400 million in Q2, up from $376 million in Q1, due to seasonal strength in Europe and non-California states, offset by some decline in California. We plan to under-ship to the end market demand for our products by approximately $90 million in Q2. We expect the channel to normalize by the end of Q2 on microinverters as we previously forecasted. Our channel is almost normal on batteries already. Let’s talk about products, starting with IQ Battery. Our third-generation battery called IQ Battery 5P has been very well received. It delivers the best power specs and commissioning times of any Enphase battery till date at an industry-leading 15-year warranty. Battery adoption rates are on the rise globally and we are well-positioned to grow our sales in 2024.”