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

Growth investors are on the lookout for stocks displaying robust revenue and EPS growth. In this analysis, we'll assess whether ENPHASE ENERGY INC (NASDAQ:ENPH) aligns with growth investing criteria, especially as it consolidates and signals a possible breakout. As always, investors should conduct their own research, but ENPHASE ENERGY INC has surfaced on our radar for growth with base formation, warranting further examination.

Growth Analysis for NASDAQ:ENPH

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:ENPH boasts a 9 out of 10:

• The Earnings Per Share has grown by an impressive 75.55% over the past year.
• The Earnings Per Share has been growing by 69.42% on average over the past years. This is a very strong growth
• ENPH shows a strong growth in Revenue. In the last year, the Revenue has grown by 61.11%.
• The Revenue has been growing by 52.11% on average over the past years. This is a very strong growth!
• 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.
• The Revenue is expected to grow by 21.22% on average over the next years. This is a very strong growth

What does the Health looks like for NASDAQ:ENPH

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NASDAQ:ENPH, the assigned 7 reflects its health status:

• An Altman-Z score of 6.05 indicates that ENPH is not in any danger for bankruptcy at the moment.
• ENPH has a Altman-Z score of 6.05. This is in the better half of the industry: ENPH outperforms 66.98% of its industry peers.
• The Debt to FCF ratio of ENPH is 1.50, which is an excellent value as it means it would take ENPH, only 1.50 years of fcf income to pay off 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 72.64% 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.
• A Current Ratio of 3.44 indicates that ENPH has no problem at all paying its short term obligations.
• ENPH has a Quick Ratio of 3.22. This indicates that ENPH is financially healthy and has no problem in meeting its short term obligations.
• ENPH has a Quick ratio of 3.22. This is in the better half of the industry: ENPH outperforms 63.21% of its industry peers.

Analyzing Profitability Metrics

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. NASDAQ:ENPH has earned a 8 out of 10:

• ENPH's Return On Assets of 16.52% is amongst the best of the industry. ENPH outperforms 82.08% of its industry peers.
• The Return On Equity of ENPH (58.88%) is better than 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.
• The Average Return On Invested Capital over the past 3 years for ENPH is above the industry average of 13.00%.
• The 3 year average ROIC (17.57%) for ENPH is below the current ROIC(20.46%), indicating increased profibility in the last year.
• ENPH has a better Profit Margin (20.48%) than 74.53% of its industry peers.
• With a decent Operating Margin value of 22.66%, ENPH is doing good in the industry, outperforming 73.58% of the companies in the same industry.
• ENPH's Operating Margin has improved in the last couple of years.
• ENPH's Gross Margin has improved in the last couple of years.

Looking at the Setup

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:ENPH has a 8 as its setup rating:

Although the technical rating is bad, ENPH does present a nice setup opportunity. Prices have been consolidating lately. There is a support zone below the current price at 119.16, a Stop Loss order could be placed below this zone.

More Strong Growth stocks can be found in our Strong Growth screener.

Our latest full fundamental report of ENPH contains the most current fundamental analsysis.

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.