10 Best Renewable Energy Stocks To Buy According to Hedge Funds

6. Enphase (NASDAQ:ENPH)  

Number of Hedge Fund Holders: 42  

Market Capitalization as of September 2: $16.39 Billion  

Enphase (NASDAQ:ENPH) is a global energy technology company that specializes in solar microinverters, energy storage solutions, and energy management devices. Enphase’s (NASDAQ:ENPH) microinverters convert direct current (DC) from solar panels into alternating current (AC) for use and are critical for optimizing solar energy systems, enhancing efficiency, and reliability, and are also easy to install. The company is a market leader in residential solar in the U.S. Europe and emerging markets in Asia.

Enphase (NASDAQ:ENPH) is strategically well-positioned to benefit from the U.S. Inflation Reduction Act (IRA) as the company’s microinverters can help customers qualify for a 10% Investment Tax Credit (ITC) under the Domestic Content Bonus Credit provisions of the Inflation Reduction Act which is available for solar projects that utilize a certain percentage of U.S.-made components. This advantage is expected to support the company in achieving higher sales and enhancing gross margins, particularly in Q4 2024.

In Q2, Enphase (NASDAQ:ENPH) reported revenue and earnings slightly below expectations due to low sales in Europe. However, it maintained a gross margin of 47.1%, surpassing expectations. Despite competition, Enphase’s (NASDAQ:ENPH) microinverter technology remains a top choice among consumers and is successfully capturing the market. The new net metering policy in California “Net Energy Metering 3.0” which incentivizes homeowners to consume their solar energy rather than selling it back to the grid led to a significant increase in its energy storage systems. In Q2 Enphase (NASDAQ:ENPH) reported a 32% increase in revenue from the United States and has already booked orders for 85% of the revenue in Q3.

Enphase (NASDAQ:ENPH) products including microinverters, energy management software, and battery storage solutions, are expected to drive further growth. Industry analysts have a consensus on the stock’s Buy rating, estimating an average share price target at $126.17, which represents a 7.55% upside potential from current levels. As of September 2, the company is valued at $16.39 billion. The stock is held by 42 hedge funds with stakes worth $505.91 million as of the second quarter. As of June 30, Citadel Investment Group is the largest shareholder in the company and owns stocks worth $141.66 million.