Democratic presidential nominee Joe Biden has pledged a clean energy revolution that could create job opportunities for millions of middle-class workers if is elected as the next President. The $2 trillion climate plan announced by Biden envisions a monumental shift to alternative energy sources over the following three decades. 

He also plans to add more than 500 million solar panels to America’s energy infrastructure in the next five years. Biden’s plan to eliminate carbon emission in the United States calls for the restructuring of major industries with alternative energy sources. 

Hence, companies operating in the field of renewable energy, such as SolarEdge Technologies, Inc. (SEDG), Enphase Energy, Inc. (ENPH), and FirstSolar, Inc.(FSLR) could skyrocket if Biden becomes the next president. 

SolarEdge Technologies, Inc.(SEDG)

SEDG designs and manufactures direct current (DC) optimized inverter systems for solar photovoltaic installations and monitoring systems. Its products are widely used in communication devices, smart energy management solutions, and a cloud-based monitoring platform. The company’s photovoltaic inverters are used to power residential, commercial, and small utility-scale projects.

On June 23rd, SEDG announced the launch of its new Energy Hub Inverter with Prism Technology, which aims to ease the installation process with higher flexibility in the home backup system. This new technology could efficiently turn houses into smart energy homes. 

SEDG has entered into a four-year agreement with an international solar investor – Enfindus. Under this agreement, SEDG would supply inverters for one gigawatt of a PV system to Enfindus, throughout Europe. This partnership is aimed at helping businesses reduce their energy cost while significantly increasing solar energy production across the continent. 

SEDG’s third quarter (ended September 2020) revenue increased by 1.9% sequentially to $338.1 million. This can be attributed to a slight increase in revenues from the solar business segment to $312.50 million.GAAP net income rose 5.3% from the year-ago value to $43.8 million, while EPS grew 2.5% year-over-year to $0.83. 

The consensus EPS estimate of $5.01 for the next year indicates a 32.9% improvement year-over-year. Moreover, SEDG beat the street EPS estimates in three out of the trailing four quarters, which is impressive. The consensus revenue estimate of $1.85 billion for the next year indicates a 23.8% growth from the same period last year. 

The stock has gained 181.5% year-to-date. SEDG has a “B” for Trade Grade in our POWR Ratings. In the 16-stock Solar industry, it is ranked #1 

Enphase Energy, Inc. (ENPH) 

ENPH is an energy technology company that designs, manufactures, and sells software-driven solar photovoltaic energy solutions internationally. The company provides a semiconductor-based microinverter that efficiently converts energy at an individual solar module level, as well as energy monitoring and control services. 

On October 20th, ENPH announced a strategic partnership with SunCool Energy to supply Enphase solar systems in South Florida.

On October 12th, the company announced that it has entered into a partnership with Natura Living, a leading residential and commercial solar installer company of Thailand to power PepsiCo’s agronomy building in Thailand with Enphase IQ 7+ microinverters. 

ENPH’s revenue grew 42.2% sequentially to $178.50 million in the third quarter ended September 2020. Operating income grew 53.5% year-over-year to $51.76 million, while EPS rose 24% from the year-ago value to $0.31.Non-GAAP gross margin increased 104 basis points to 41% over this period.

The consensus EPS estimate of $0.42 for the fourth quarter ending December 2020 indicates a 7.7% improvement year-over-year. ENPH has an impressive earnings surprise history as well, as it beat the street EPS estimates in each of the trailing four quarters. The consensus revenue estimate of $255.23 million for the quarter indicates a 21.5% increase year-over-year. 

The stock has gained 297.4% year-to-date. ENPH’s promising outlook is reflected in its POWR Ratings. It is rated “Buy” with a “B” for Trade Grade and Peer Grade. Among the 16 stocks in the Solar industry, it’s ranked #2.

First Solar, Inc. (FSLR) 

FSLR is an American manufacturer and provider of photovoltaic solar panels and utility-scale PV power plants, operating globally in primarily two segments – Modules and Systems. Under the Module segment, cadmium telluride solar modules are built to convert sunlight into electricity, whereas, the Systems segment is responsible for providing power plant solutions. 

FSLR has recently entered into an agreement with Vistra Corp. under which it will supply its 869 megawatts of PV solar modules for providing power to Vistra’s five utility-scale solar projects across Texas. This makes FSLR stand out in the solar industry as a reliable PV manufacturer. 

On September 23rd, FSLR announced that JP Energie Environment selected Series 6 photovoltaic solar modules to power the Labrade solar power plant, the largest urban solar PV power plant in Europe. 

FSLR has the world’s first solar plant which is licensed to commercially provide grid services. The company’s thin-film technology has been deployed across over 400 projects in France alone. This technology could form the backbone of France’s solar fleet.

FSLR’s third quarter (ended September 2020) net sales rose 69.6% year-over-year to $927.57 million. Net income grew 406.3% from the prior-year quarter to $155.04 million, while gross profit grew 111.8% from the same period last year to $293.02 million. EPS increased 403.4% from the year-ago value to $1.46. 

The consensus EPS estimate of $3.67 for the current year indicates an improvement of 148% year-over-year. Moreover, FSLR beat the street EPS estimates in three out of the trailing four quarters, which is impressive. The consensus revenue estimate of $661.97 million for the next quarter indicates a 24.4% growth from the same period last year. 

The stock has gained 58.9% year-to-date. FSLR’s strong fundamentals are reflected in its POWR Ratings. It has a “Buy” rating with an “A” for Trade Grade and Peer Grade, and a “B” for Buy & Hold Grade. It is ranked #3 in the same industry.

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SEDG shares were trading at $202.78 per share on Tuesday afternoon, down $64.94 (-24.26%). Year-to-date, SEDG has gained 113.25%, versus a 5.83% rise in the benchmark S&P 500 index during the same period.

About the Author: Imon Ghosh

Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...

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