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Why Enphase Energy Inc's Shares Popped 24% Today

By Travis Hoium - Feb 28, 2018 at 2:48PM

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A better-than-expected earnings report sent Enphase Energy Inc's shares higher, but the company still can't make it to profitability.

What happened 

Shares of microinverter manufacturer Enphase Energy Inc (ENPH -0.11%) jumped as much as 23.7% in trading Wednesday after reporting a better-than-expected fourth-quarter earnings report. Shares gave back some of their early gains but were up 15.8% at 2:05 p.m. EST. 

So what

Revenue fell 12.1%, to $79.7 million, which was at the high end of guidance and above the average estimate of $75.7 million from Wall Street analysts. Net loss was $2.9 million, or $0.03 per share, which fell slightly below the $0.01 loss estimated by analysts.

Roof with solar panels on a sunny day.

Image source: Getty Images.

First quarter 2018 revenue guidance of $65 million to $70 million was at the very top end of the $65.2 million expected by analysts and was likely a big driver of the stock today. But management also expects to lose money in the quarter, once again, based on gross margin guidance of 22% to 25% and operating expenses of $19.5 million to $20.5 million. 

Now what

Enphase has been able to increase gross margins and lower operating costs over the past year, but the company still is losing money. In fact, in 2017, the net loss was $45.2 million and losses are expected to continue early in 2018. The company may be heading in the right direction, but until we see consistent profitability, this isn't a solar stock I'll be jumping into.

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Enphase Energy, Inc. Stock Quote
Enphase Energy, Inc.
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