Enphase Energy, Inc. (ENPH) in Petaluma, Calif., is a home energy solutions provider for the global solar photovoltaic industry. Shares of ENPH have been experiencing selling pressure lately due to ongoing supply chain disruptions and geopolitical tensions. The stock has slumped 18.9% in price year-to-date.
Also, the company is dealing with limited inventory for its energy storage products. Its cash and cash equivalents have declined 82.4% year-over-year to $119.32 million for its fiscal year ended Dec. 31, 2021. Its net income decreased 27.9% year-over-year to $52.59 million, and its earnings per share declined 26% year-over-year to $0.37.
The solar industry is projected to grow markedly, driven by a surge in demand and increasing investment in clean energy. According to a report by Report Linker, the solar power market in the U.S. is projected to reach 13.55 gigawatts by 2026, with a 9.69% CAGR. Given these factors, Wall Street analysts are bullish on quality solar stocks Sunrun Inc. (RUN), Sunnova Energy International Inc. (NOVA), and Shoals Technologies Group, Inc. (SHLS).
Sunrun Inc. (RUN)
San Francisco-based RUN designs, develops, markets, sells, and maintains residential solar energy systems in the U.S. The company sells solar energy systems and products that include panels, battery storage, and solar leads generated to customers. It primarily serves residential homeowners.
This January, RUN replaced its $250 million recourse lending facility with a larger $425 million facility at enhanced terms and a longer tenor. This expands its asset borrowing base and supports more efficient inventory financing. The improved lending facility is expected to support the company’s continued growth.
Last December, RUN and BRIDGE Housing celebrated the completion of solar installations serving 94 rental homes in Suisun City, California. This partnership is expected to clean energy access and bill savings to renters across California and boost the revenue streams.
In the fiscal year 2021 fourth quarter, ended Dec. 31, 2021, RUN’s total revenue increased 35.8% year-over-year to $435.23 million. The company’s cash increased 18.8% over a year ended Dec. 31, 2021, to come in at $617.63 million. RUN’s total assets grew 14.6% year-over-year to $16.48 billion as of Dec. 31, 2021.
The $416.43 million consensus revenue estimate for the fiscal first quarter, ending March 31, 2022, represents 24.4% year-over-year growth from the same period in 2021. The Street expects RUN’s EPS to improve 30.5% year-over-year in the current quarter. The company has an impressive earnings surprise history; it has surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock has gained 1.6% in price over the last five days. However, the 12-month median price target of $52.93 indicates a 128.8% potential upside from yesterday’s closing price of $23.13. The price targets range from a low of $16.15 to a high of $91.00. Of the 14 Wall Street analysts that rated RUN, 11 rated it Buy, one rated it Hold, while two rated it Sell.
Sunnova Energy International Inc. (NOVA)
NOVA is a leading provider of residential solar and energy storage services in the U.S. The Houston, Tex., company offers operations, maintenance, monitoring, repairs, equipment upgrades, power optimization, and diagnostics services. It has a generation capacity of more than 790 megawatts and serves approximately 107,000 customers.
On Feb. 1, 2022, NOVA and Generac expanded their strategic partnership to provide new hardware technology with increased resiliency to homeowners through the energy independent Sunnova Adaptive Home. With this partnership, NOVA might leverage its dealer and installer networks, expand the customer base, and increase revenues.
Last November, NOVA launched an exclusive partnership with Brinks Home to offer home security and energy solutions to its customers. With this partnership, NOVA is expected to incorporate new technologies into its offerings, reach new customers, and boost its revenue streams.
NOVA’s revenue increased 37.3% year-over-year to $68.90 million in its fiscal third quarter of 2021 ended Sept. 30, 2021. The company’s cash increased 94.5% over nine months ended Sept. 30, 2021, to come in at $408.16 million. NOVA’s total assets have grown 41.1% over the past nine months to $5.06 billion.
Analysts expect NOVA’s revenue for its fiscal fourth quarter, ended December 31, 2021, to come in at $65.70 million, representing a 72.8% rise year-over-year. Analysts expect NOVA’s EPS to improve 72.9% year-over-year in the about-to-be-reported quarter.
Over the past year, NOVA’s shares have slumped 65.5%. However, the 12-month median price target of $40.13 indicates a 134.4% potential upside from yesterday’s closing price of $17.12. The price targets range from a low of $28.00 to a high of $53.00. Each of the eight Wall Street analysts that rated NOVA rated it Buy.
Shoals Technologies Group, Inc. (SHLS)
SHLS offers an electrical balance of system (EBOS) solutions for solar energy projects in the U.S. The Muscle Shoals, Ala.-based company offers EBOS components, such as cable assemblies, combiners, recombiners, wireless monitoring systems, transition enclosures, and junction boxes. SHLS markets and sells its products to engineering, construction, and procurement firms that build solar energy projects.
This January, SHLS announced a strategic agreement with Luminace to pursue distributed renewable energy generation and EV charging solutions across the U.S. With this collaboration, SHLS might leverage its innovative technology, extend its customer reach, and boost profits.
Last November, SHLS, and SKYCHARGER partnered to scale EV charging infrastructure by providing innovative solutions. SHLS’ EV solutions will lower the speed of deployments and reduce site costs. This partnership is expected to increase the company’s customer base and profitability.
In its fiscal year 2021 third quarter, ended Sept. 30, 2021, SHLS’s revenue increased 13.8% year-over-year to $59.84 million. SHLS’ gross profit grew 5.2% year-over-year to $21.77 million. The company’s cash and cash equivalents increased 40.9% over the nine months ended Sept. 30, 2021, to come in at $14.19 million. And its total assets grew 96% over the nine months to $382.81 million.
The $72.37 million consensus revenue estimate for the fiscal first quarter ending March 2022 represents 58.7% year-over-year growth from the same period in 2021. The Street expects SHLS’ EPS to improve 92% year-over-year in the current quarter to come in at $0.10. The company has an impressive earnings surprise history; it surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock has declined 45.4% in price year-to-date. However, the 12-month median price target of $30.33 indicates a 128.6% potential upside from yesterday’s closing price of $13.27. The price targets range from a low of $20.00 to a high of $39.00. Of the six Wall Street analysts that rated SHLS, four rated it Buy, while two rated it Hold.
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RUN shares were trading at $21.41 per share on Friday afternoon, down $1.72 (-7.44%). Year-to-date, RUN has declined -37.58%, versus a -8.74% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions. More...
More Resources for the Stocks in this Article
| Ticker | POWR Rating | Industry Rank | Rank in Industry |
| RUN | Get Rating | Get Rating | Get Rating |
| NOVA | Get Rating | Get Rating | Get Rating |
| SHLS | Get Rating | Get Rating | Get Rating |
| ENPH | Get Rating | Get Rating | Get Rating |
