NASDAQ:ENPH: a strong growth stock preparing for the next leg up?.

Exploring Growth Potential: ENPHASE ENERGY INC (NASDAQ:ENPH) and Its Base Formation. Growth investors seek promising revenue and EPS growth, and ENPHASE ENERGY INC has come under our scrutiny for potential growth investing. While it's crucial to do your own research, we've detected ENPHASE ENERGY INC on our screen for growth with base formation, suggesting it merits a closer look.

A Closer Look at Growth for NASDAQ:ENPH

ChartMill assigns a Growth Rating to every stock. This score ranges from 0 to 10 and evaluates the different growth aspects like EPS and Revenue, both in the past as in the future. NASDAQ:ENPH scores a 9 out of 10:

• ENPH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 75.55%, which is quite impressive.
• The Earnings Per Share has been growing by 69.42% on average over the past years. This is a very strong growth
• The Revenue has grown by 61.11% in the past year. This is a very strong growth!
• Measured over the past years, ENPH shows a very strong growth in Revenue. The Revenue has been growing by 52.11% on average per year.
• Based on estimates for the next years, ENPH will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.23% on average per year.
• ENPH is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 21.22% yearly.

Assessing Health Metrics for NASDAQ:ENPH

ChartMill assigns a Health Rating to every stock. This score ranges from 0 to 10 and evaluates the different health aspects like liquidity and solvency, both absolutely, but also relative to the industry peers. NASDAQ:ENPH scores a 7 out of 10:

• An Altman-Z score of 6.05 indicates that ENPH is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 6.05, ENPH is in the better half of the industry, outperforming 67.92% of the companies in the same industry.
• ENPH has a debt to FCF ratio of 1.50. This is a very positive value and a sign of high solvency as it would only need 1.50 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 1.50, ENPH is in the better half of the industry, outperforming 71.70% of the companies in the same industry.
• Although ENPH does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
• ENPH has a Current Ratio of 3.44. This indicates that ENPH is financially healthy and has no problem in meeting its short term obligations.
• A Quick Ratio of 3.22 indicates that ENPH has no problem at all paying its short term obligations.
• ENPH's Quick ratio of 3.22 is fine compared to the rest of the industry. ENPH outperforms 64.15% of its industry peers.

What does the Profitability looks like for NASDAQ:ENPH

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:ENPH, the assigned 8 is noteworthy for profitability:

• ENPH has a Return On Assets of 16.52%. This is amongst the best in the industry. ENPH outperforms 83.02% of its industry peers.
• ENPH's Return On Equity of 58.88% is amongst the best of the industry. ENPH outperforms 96.23% of its industry peers.
• ENPH's Return On Invested Capital of 20.46% is amongst the best of the industry. ENPH outperforms 83.02% of its industry peers.
• Measured over the past 3 years, the Average Return On Invested Capital for ENPH is above the industry average of 13.08%.
• The last Return On Invested Capital (20.46%) for ENPH is above the 3 year average (17.57%), which is a sign of increasing profitability.
• ENPH's Profit Margin of 20.48% is fine compared to the rest of the industry. ENPH outperforms 73.58% of its industry peers.
• ENPH's Operating Margin of 22.66% is fine compared to the rest of the industry. ENPH outperforms 74.53% of its industry peers.
• In the last couple of years the Operating Margin of ENPH has grown nicely.
• In the last couple of years the Gross Margin of ENPH has grown nicely.

Looking at the Setup

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NASDAQ:ENPH this score is currently 8:

ENPH has a bad technical rating, but it does show a decent setup pattern. Prices have been consolidating lately. There is a resistance zone just above the current price starting at 123.54. Right above this resistance zone may be a good entry point.

Every day, new Strong Growth stocks can be found on ChartMill in our Strong Growth screener.

Check the latest full fundamental report of ENPH for a complete fundamental analysis.

Check the latest full technical report of ENPH for a complete technical analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.