5. Enphase Energy (NASDAQ:ENPH)
Number of Hedge Fund Holders: 42
Market Capitalization as of August 20: $15.89 Billion
Enphase Energy (NASDAQ:ENPH) is a global energy technology company specializing in solar microinverters, energy management technology, and energy storage solutions. The company’s solar microinverters convert direct current (DC) electricity from solar panels into alternating current (AC) for use in homes and businesses. Enphase Energy’s (NASDAQ:ENPH) products are critical for optimizing solar energy systems and enhancing efficiency. Enphase Energy (NASDAQ:ENPH) has established itself as a market leader in residential solar in the U.S., Europe, and emerging markets in Asia.
Enphase Energy (NASDAQ: ENPH) reported mixed results for Q2 2024, with revenue and earnings slightly below expectations due to low sales in Europe. However, the company maintained a gross margin of 47.1%, surpassing consensus expectations. The company’s microinverter technology remains a top choice among consumers, and its growing presence in Europe suggests that it is successfully capturing market share from rivals. Moreover, the transition to the new net metering policy “Net Energy Metering 3.0” in California which incentivizes homeowners to use their own solar energy rather than selling excess energy back to the grid, has led to a significant increase in its energy storage systems that further boosted the company’s revenue. The company reported a 32% increase in U.S. revenue in Q2 2024. For Q3 2024, almost 85% of the products are already booked by orders.
Enphase Energy (NASDAQ:ENPH) is well positioned to benefit from the U.S. Inflation Reduction Act (IRA) through its domestic production capabilities. The company’s microinverters can help customers qualify for a 10% Investment Tax Credit (ITC) bonus 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, including microinverters. This strategic advantage is expected to drive market share gains and enhance gross margins, particularly in Q4 2024.
The company’s recent product launches, including new microinverters, energy management software, and battery storage solutions, are expected to drive future growth. Additionally, the company’s growing presence in Asia and European markets will further support its growth trajectory. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $126.17, which represents a 7.55% upside potential from its current level. The company is valued at $15.89 billion as of August 20. As of the second quarter, the stock is held by 42 hedge funds with stakes worth $505.91 million. Citadel Investment Group is the largest shareholder in the company and has stocks worth $141.66 million as of June 30.
