High-growth solar stocks Enphase Energy ( ENPH -2.61% ) and SolarEdge Technologies ( SEDG -5.60% ) have been on incredible runs this year. SolarEdge shares are up 186%, while Enphase stock has gained an incredible 389%.
But following earnings in October, shares of SolarEdge fell sharply, while Enphase's stock continued moving higher. In the video below from the Nov. 11 edition of "The Wrap" on Motley Fool Live, host Jason Hall, an energy-industry expert who owns shares of both companies, offered some context on what the market was reacting to coming out of earnings, and how he was thinking about both companies going forward.
JASON HALL: SolarEdge, ticker SEDG, I'm sure anybody that follows the renewable-energy industry saw SolarEdge stock fall and Enphase, ticker ENPH -- it's a competitor in a duopoly in North America -- Enphase stock went up.
Enphase revenue went up 40%; SolarEdge revenue fell. That was expected, though -- they're not exactly direct competitors -- their results were within management guidance. Gross margin actually got better, revenue fell 19%. That was a pretty big drop and that was not what the market was looking for, even though, like I said, it hit management's expectations.
But here's the thing. Here is for me -- If I'm not concerned, I'm certainly paying more attention. I'm on the edge of being concerned, and that's energy-storage products. The company bought Kokam, a Korean company that makes lithium batteries, a couple of years ago with the idea to bring residential battery products to the market. There was a lot of expectations it would happen this year.
Enphase actually did that. Enphase has brought theirs to the market, and some other things that's working well for them. SolarEdge says it's going to be second or third quarter of next year before they come to market. I'm almost concerned about it. It's so early, and I don't think that being "late" is going to be a death knell by any means, because it's going to be a huge long-tail growth trend. I'm watching it closely, and I think investors should be doing the same thing. Again, I'm not overly worried, but it's got me paying a lot more attention because it's not ideal what you want to see when the competitors are getting into that big growth market (ahead of you.)