ENPH Up 8.6% In A Day. Do You Buy Or Wait?
Enphase Energy (ENPH) stock is up 8.6% in a day. The stock looks fairly priced at the moment. Consider the following data:
- Size: A $5.2 Bil company with $1.5 Bil in revenue currently trading at $39.65.
- Fundamentals: Last 12 month revenue growth of 4.4% and operating margin of 12.8%.
- Liquidity: Has Debt to Equity ratio of 0.2 and Cash to Assets ratio of 0.5
- Valuation: Currently trading at P/E multiple of 29.7 and P/EBIT multiple of 24.0
- Has returned (median) 11.8% within a year following sharp dips since 2010. See ENPH Dip Buy Analysis.
While we like to ride the momentum if the fundamentals check out – for ENPH, see Buy or Sell ENPH Stock – we are vary of bull traps. Specifically, it is worth trying to answer if things get really bad, and ENPH drops 20-30% to $27.75 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Enphase Energy (ENPH) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.
Below are the details, but before that, as a quick background: ENPH provides innovative home energy solutions for the solar photovoltaic industry, serving solar distributors, installers, OEMs, partners, and homeowners worldwide.
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2022 Inflation Shock
- ENPH stock fell 77.5% from a high of $336.00 on 2 December 2022 to $75.56 on 9 November 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $137.34 on 26 December 2023 , and currently trades at $39.65
| ENPH | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -77.5% | -25.4% |
| Time to Full Recovery | Not Fully Recovered days | 464 days |
2020 Covid Pandemic
- ENPH stock fell 59.4% from a high of $59.09 on 21 February 2020 to $23.99 on 18 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 11 May 2020
| ENPH | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -59.4% | -33.9% |
| Time to Full Recovery | 54 days | 148 days |
2018 Correction
- ENPH stock fell 63.2% from a high of $1.90 on 27 February 2017 to $0.70 on 18 May 2017 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 November 2017
| ENPH | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -63.2% | -19.8% |
| Time to Full Recovery | 176 days | 120 days |
Worried that ENPH could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.