NASDAQ:ENPH is showing decent growth, but is still valued reasonably.

Take a closer look at ENPHASE ENERGY INC (NASDAQ:ENPH), an affordable growth stock uncovered by our stock screener. NASDAQ:ENPH boasts strong growth prospects and excels in financial health indicators, all while maintaining a reasonable valuation. Let's break it down further.

Unpacking NASDAQ:ENPH's Growth Rating

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 8 out of 10:

• ENPH shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 39.84%, 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 34.37% in the past year. This is a very strong growth!
• ENPH shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 52.11% yearly.
• Based on estimates for the next years, ENPH will show a quite strong growth in Earnings Per Share. The EPS will grow by 15.43% on average per year.
• Based on estimates for the next years, ENPH will show a quite strong growth in Revenue. The Revenue will grow by 18.10% on average per year.

ChartMill's Evaluation of Valuation

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:ENPH boasts a 7 out of 10:

• ENPH's Price/Earnings ratio is a bit cheaper when compared to the industry. ENPH is cheaper than 74.29% of the companies in the same industry.
• ENPH's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.44.
• Based on the Price/Forward Earnings ratio, ENPH is valued cheaper than 80.95% of the companies in the same industry.
• When comparing the Price/Forward Earnings ratio of ENPH to the average of the S&P500 Index (18.82), we can say ENPH is valued slightly cheaper.
• Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ENPH indicates a somewhat cheap valuation: ENPH is cheaper than 72.38% of the companies listed in the same industry.
• 91.43% of the companies in the same industry are more expensive than ENPH, based on the Price/Free Cash Flow ratio.
• ENPH has an outstanding profitability rating, which may justify a higher PE ratio.
• ENPH's earnings are expected to grow with 21.77% in the coming years. This may justify a more expensive valuation.

Looking at the Health

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 6 reflects its health status:

• ENPH has an Altman-Z score of 4.54. This indicates that ENPH is financially healthy and has little risk of bankruptcy at the moment.
• ENPH has a debt to FCF ratio of 1.60. This is a very positive value and a sign of high solvency as it would only need 1.60 years to pay back of all of its debts.
• ENPH's Debt to FCF ratio of 1.60 is fine compared to the rest of the industry. ENPH outperforms 71.43% of its industry peers.
• Even though the debt/equity ratio score it not favorable for ENPH, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
• ENPH has a Current Ratio of 3.36. This indicates that ENPH is financially healthy and has no problem in meeting its short term obligations.
• ENPH has a Quick Ratio of 3.13. This indicates that ENPH is financially healthy and has no problem in meeting its short term obligations.
• ENPH has a Quick ratio of 3.13. This is in the better half of the industry: ENPH outperforms 61.90% of its industry peers.

How do we evaluate the Profitability for NASDAQ:ENPH?

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NASDAQ:ENPH, the assigned 8 is a significant indicator of profitability:

• With an excellent Return On Assets value of 16.09%, ENPH belongs to the best of the industry, outperforming 80.95% of the companies in the same industry.
• ENPH has a Return On Equity of 56.35%. This is amongst the best in the industry. ENPH outperforms 96.19% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 19.47%, ENPH belongs to the top of the industry, outperforming 81.90% of the companies in the same industry.
• Measured over the past 3 years, the Average Return On Invested Capital for ENPH is above the industry average of 12.87%.
• The last Return On Invested Capital (19.47%) for ENPH is above the 3 year average (17.57%), which is a sign of increasing profitability.
• ENPH's Profit Margin of 21.08% is fine compared to the rest of the industry. ENPH outperforms 75.24% of its industry peers.
• Looking at the Operating Margin, with a value of 22.69%, ENPH is in the better half of the industry, outperforming 73.33% of the companies in the same industry.
• 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.

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

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

Disclaimer

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.