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Why Enphase Energy (ENPH) Outpaced the Stock Market Today

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Enphase Energy (ENPH - Free Report) ended the recent trading session at $100.98, demonstrating a +1.8% swing from the preceding day's closing price. The stock's change was more than the S&P 500's daily gain of 0.61%. Elsewhere, the Dow saw an upswing of 0.97%, while the tech-heavy Nasdaq appreciated by 0.33%.

Shares of the solar technology company have depreciated by 6.27% over the course of the past month, underperforming the Oils-Energy sector's loss of 2.26% and the S&P 500's gain of 5.36%.

Market participants will be closely following the financial results of Enphase Energy in its upcoming release. The company plans to announce its earnings on October 22, 2024. The company's upcoming EPS is projected at $0.77, signifying a 24.51% drop compared to the same quarter of the previous year. In the meantime, our current consensus estimate forecasts the revenue to be $392.19 million, indicating a 28.83% decline compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $2.53 per share and a revenue of $1.4 billion, representing changes of -42.63% and -38.8%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Enphase Energy. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 1.05% decrease. Currently, Enphase Energy is carrying a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Enphase Energy has a Forward P/E ratio of 39.24 right now. For comparison, its industry has an average Forward P/E of 13.87, which means Enphase Energy is trading at a premium to the group.

Meanwhile, ENPH's PEG ratio is currently 2.48. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Solar industry held an average PEG ratio of 1.78.

The Solar industry is part of the Oils-Energy sector. This industry currently has a Zacks Industry Rank of 107, which puts it in the top 43% of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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