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General Category => Investment Ideas => Topic started by: rros on August 19, 2017, 10:01:52 AM

Title: ENPH - Enphase Energy
Post by: rros on August 19, 2017, 10:01:52 AM
Solar investment. Speculative. Turnaround.

This is a turnaround issue. I have followed this company for close to 2 years and would like to share some information as well as get some feedback. Company is involved in what is known as "module-level power electronics" a technology subset within the solar panel manufacturing field. Panels require inverters to convert DC energy into usable AC energy. There are 3 basic ways of doing this: through string inverters, power optimizers or microinverters. Enphase specialized in this last area and has as its main competitor a company that has specialized in power optimizers (sedg).

Recently, with the introduction of a new class of microinverters, enphase has been able to integrate their technology into the manufacturing process of solar panels. These new panels are called ACM (AC modules) where the microinverter is now attached to the panel and the need for assembling it by solar roof installers may -and eventually will- disappear.

In the last year or so, previous management made some bad decisions: went into unproductive product lines, signed bad loan deals and wasted precious resources in non-conducive activities. On January this year, TJ Rodgers and John Doerr bought a chunk of the company (close to 10% combined) and TJ R was named a Director. After an abysmal first quarter, where California market tanked greatly affecting enphase's numbers, a new COO was named to take charge of operations: Badri Kothandaraman.

Both TJ R and Badri are CYpress semiconductors guys. In fact, TJ R was one of the founders. This is important because it was TJ R who discovered the novel technology of Sunpower and invested his own money when the company was failing as a start up. We all know what happened to Sunpower years later. In that specific case, TJ R also brought into Sunpower the management style of Cypress and covered many top, essential positions with CY management.

In ENPHs most recent quarter its 10 year old CEO got ousted. While there is a transition going on and we are waiting for the announcement of a new CEO by 8/31, rumor has been that Badri K, former CY's executive now performing as COO, might become the permanent CEO. This would further solidify TJ R's move into turning the company around.

As for numbers, last Q was the 1Q company did not burn cash with 31 mill in their coffers, as a result of cleaning up inventory. By the end of this Q, company would have transitioned completely to the higher margin microinverter named IQ6. Company has also signed deals with LG and Jinko Solar both of which will now carry ACMs with integrated micros. LG's ACM panels are already being offered in the market and it is expected that this coming quarter will bring color into ACMs sales. Jinko is not expected to offer integrated modules until later this year.

Enphase has been rapidly correcting past management mistakes and imposing a new style and discipline, evident in last Q numbers. COO has released a working plan on a path to profitability and growth. Company has guided flat sales for 3Q most likely due to transition issues although they officialy mentioned components issues.

There are risks and obstacles in the road to success. Micros are a different technology than the one offered by optimizers. There is a large public discussion on which technology offers the best advantage or if both could move forward and subsist together. Enphase, in particular, has a noose around its neck in a credit line by Tennenbaum (50 million) with covenants that may hit the company hard in 2018 so while bankruptcy doesn't appear to be in the cards anymore, dilution might. Next quarter's guidance is critical in that it will show a new CEOs work, the chance of hitting all stated benchmarks and the potential and acceptance by the market of the ACM's.

Yet, the most important piece of information in this analysis is not to disregard the direct involvement of TJ Rodgers, his philosophy of fighting for shareholders and what he did with Sunpower.

Overall, solar seems to be on the up and up and most public companies in this segment have been posting much better numbers as of late. Solar has already achieved parity in some parts of the world becoming as cheap as wind energy.

Below are 3 informative articles:
https://www.greentechmedia.com/articles/read/silicon-valleys-john-doerr-and-tj-rodgers-invest-10m-in-enphases-microin
http://www.marketwired.com/press-release/enphase-energy-announces-strategic-investment-from-tj-rodgers-and-john-doerr-nasdaq-enph-2187536.htm
http://newsroom.enphase.com/releasedetail.cfm?releaseid=1021173
Title: Re: ENPH - Enphase Energy
Post by: rros on September 15, 2017, 09:13:56 PM
So... up 70% since the write up.

More upside coming. Not too late.
Title: Re: ENPH - Enphase Energy
Post by: rros on November 08, 2017, 01:39:17 PM
ENPH just reported. New CEO Badri Kothandaraman sparked new life into this company and this incipient turnaround. Miles away from prior CEO, B.K. seems keen in only one thing: execution. Coming IQ7, new partners, expansion in India and expansion of distribution of ACMs will guarantee higher prices throughout 2018. Together with fiscal discipline, margin expansion and sales growth. Risks: Saniva tariffs (low), new entrants (Huwaei). Oil may propel all solar. Price target eoy $2.45/$2.95. Still a good time to get on board.

Up %100 since write up.
Title: Re: ENPH - Enphase Energy
Post by: rros on March 19, 2018, 05:09:10 PM
Since write up stock appreciated over 500%. Today's close at $4.73 amid dramatic market sell off bodes well. Turnaround continues. Enphase has found a new chilean investor who took a large position in the company through private placement. New management continued hitting financial marks and is well in line to achieve their 30-20-10 goal before year's end. That is 30% gross, 20% opex and 10% net profit. Has signed contracts with 4 large panel suppliers for their newly introduced IQ7 microinverter, part of the new AC module: LG, Jinko solar, Panasonic and Waree in India.

Today's pr as a matter of information states more than 180 installers in the US have been using the new AC modules. The India office opened just 3 months ago and is in full swing. More recently, enphase applied for a waiver to import tariffs on imported solar panels that have their micros attached. Exemption to be applied only to their micros. There is a good chance this waiver will be granted.

Stock has been repricing aggressively. Still time to get in. Once cash flow stabilizes and the company is able to refinance or terminate Tennenbaun's loan/credit line the savings will flow directly to the bottom line.

More importantly, enphase is about distributed energy. Their 2019 introduction of the IQ8 microinverter will fully enable users to operate away from the grid and this may open opportunities to new business models. Including blockchain transactions.


Buy on weakness. Or simply buy. More room to appreciate.
Title: Re: ENPH - Enphase Energy
Post by: rros on May 30, 2018, 09:31:10 AM
Soon will be 1 year of this recommendation and stock borders $6.

Still time to get in. Yesterday, enphase closed its first utility scale deployment in India in partnership with solar module manufacturer Waree. This will all be ACMs, another game changer. Prospects around the world are very large and the introduction of IQ8 in 4Q08 will be yet another game changer opening even more markets. Enphase is at the early stages of their long term growth as microinverters will do to solar panels what microchips did to computing (read intel). New management in place has been consistently hitting marks at Badri's (CEO) stated goals 30-20-10 (30% gross, 20% opex, 10% net). Remember, Doerr, TJ Rodgers are behind this. And Badri (ex Cypress and Rodgers man) is behind the wheel instilling new discipline (fiscal) and new culture values (excellence).

Enphase will be an integral part of the new energy landscape as utilities will turn into allies pushing solar to next level. Buy today before 3Q sales acceleration.
Title: Re: ENPH - Enphase Energy
Post by: rros on February 05, 2019, 08:48:41 PM
It's been a while but both the company and the stock continue to move forward.

Soon, enphase will be launching an iteration of their newest IQ7 microinverter, one that will work with high powered sunpower solar panels. And soon, sunpower ACMs as well as Panasonic's will become certified. Next CC, enphase may see profitability for the first time, may announce more partnerships, CEO may put to rest diodes shortages worries and may announce the start of the production line in Mexico. Too many announcements while the biggie, ramp up of off-grid IQ8 with their secret partner may also materialize. Today's price is a good entry point as q-o-q and y-o-y comparisons may be all positive and guidance could show acceleration of sales.

More importantly, enphase has just cancelled their long term debt (fully) with Tennebaum. Convertible notes aside, the company is debt free.

Still a great buy.
Title: Re: ENPH - Enphase Energy
Post by: awindenberger on February 06, 2019, 08:53:31 AM
It's been a while but both the company and the stock continue to move forward.

Soon, enphase will be launching an iteration of their newest IQ7 microinverter, one that will work with high powered sunpower solar panels. And soon, sunpower ACMs as well as Panasonic's will become certified. Next CC, enphase may see profitability for the first time, may announce more partnerships, CEO may put to rest diodes shortages worries and may announce the start of the production line in Mexico. Too many announcements while the biggie, ramp up of off-grid IQ8 with their secret partner may also materialize. Today's price is a good entry point as q-o-q and y-o-y comparisons may be all positive and guidance could show acceleration of sales.

More importantly, enphase has just cancelled their long term debt (fully) with Tennebaum. Convertible notes aside, the company is debt free.

Still a great buy.

Thanks for that note regarding the Tennebaum payback, I missed that PR.

I'm annoyed at myself for not buying in when the stock was under $5 over the past couple months. I work for a solar EPC and we are trying to move to Enphase for all our smaller installs (single phase 240 or 3phase 208). Badri was talking about being supply constrained during the Q3 call and he was not exaggerating. We were having a very challanging time finding supply.
Title: Re: ENPH - Enphase Energy
Post by: rros on February 06, 2019, 12:40:16 PM
It's been a while but both the company and the stock continue to move forward.

Soon, enphase will be launching an iteration of their newest IQ7 microinverter, one that will work with high powered sunpower solar panels. And soon, sunpower ACMs as well as Panasonic's will become certified. Next CC, enphase may see profitability for the first time, may announce more partnerships, CEO may put to rest diodes shortages worries and may announce the start of the production line in Mexico. Too many announcements while the biggie, ramp up of off-grid IQ8 with their secret partner may also materialize. Today's price is a good entry point as q-o-q and y-o-y comparisons may be all positive and guidance could show acceleration of sales.

More importantly, enphase has just cancelled their long term debt (fully) with Tennenbaum. Convertible notes aside, the company is debt free.

Still a great buy.

Thanks for that note regarding the Tennebaum payback, I missed that PR.

I'm annoyed at myself for not buying in when the stock was under $5 over the past couple months. I work for a solar EPC and we are trying to move to Enphase for all our smaller installs (single phase 240 or 3phase 208). Badri was talking about being supply constrained during the Q3 call and he was not exaggerating. We were having a very challanging time finding supply.
Thank you for the color. More IQ7s in the channel? Supply issues should have subsided, no? US should be getting supply from the newest Mexico line. If not now, soon.

It is always great to learn from real customers/users. Unlike you, I do not know the intricacies of the technology. Just scratching the surface. Enough to understand it is top notch. I have been an investor since the Nahi days. Several years. Kept a close eye on all developments. This was a close call. TJR saved the day.  From the perspective of a shareholder, Badri has been doing a fantastic job. At least, in logistics / operations. Sales is a tougher nut.

You can't blame yourself for not buying during that soft patch. I did not like it myself when Branderiz went the hedge fund route to get additional financing through convertible notes.

Anyway, solar is such a great field to be involved with. Congratulations.
Title: Re: ENPH - Enphase Energy
Post by: rros on April 30, 2019, 02:47:06 PM
On August 18th, 2017 stock closed at 0.87. Next day I started this thread.

Tomorrow, after a solid earnings report and revenue beat and even more than solid guidance, the stock will likely set a long term double digits floor. I hope whoever read this thread went along for the ride and is still long. I am. For the next 2 years.

While the stock is high beta and MM churns a lot for inventory, there are many more catalysts into the future that may propel revenues, earnings and share price to historic highs by 4Q19. Bigger batteries, Sunpower's large attachment rate, IQ8 off-grid ramp up and grid-agnostic IQ8 launch and then, CALI 2020 when the new State law making solar roofs for new single homes mandatory, comes into effect.

Let's go for the 20 bagger and good luck. Ah.. don't forget to check today's earnings call.
Title: Re: ENPH - Enphase Energy
Post by: heth247 on April 30, 2019, 09:25:03 PM
On August 18th, 2017 stock closed at 0.87. Next day I started this thread.

Tomorrow, after a solid earnings report and revenue beat and even more than solid guidance, the stock will likely set a long term double digits floor. I hope whoever read this thread went along for the ride and is still long. I am. For the next 2 years.

While the stock is high beta and MM churns a lot for inventory, there are many more catalysts into the future that may propel revenues, earnings and share price to historic highs by 4Q19. Bigger batteries, Sunpower's large attachment rate, IQ8 off-grid ramp up and grid-agnostic IQ8 launch and then, CALI 2020 when the new State law making solar roofs for new single homes mandatory, comes into effect.

Let's go for the 20 bagger and good luck. Ah.. don't forget to check today's earnings call.

Great idea and job, and congrats on another great quarter!  I wish I know about this thread two years ago. Any other "10-bagger-in-two-years" idea?  :)
Title: Re: ENPH - Enphase Energy
Post by: rros on May 01, 2019, 03:29:55 AM
oh... nothing on my radar.
Title: Re: ENPH - Enphase Energy
Post by: supertutti on May 01, 2019, 07:09:54 AM
Is this one you are buying more of in the short term? You have been on this from the very start, great job! What is your outlook in the near and long term for this?
Title: Re: ENPH - Enphase Energy
Post by: johnny on May 01, 2019, 07:14:35 AM
respect not only to this investment but the fact that you kept this thread updated for two years while everybody ignored it. truly heroic thread
Title: Re: ENPH - Enphase Energy
Post by: rros on May 02, 2019, 07:38:19 AM
Is this one you are buying more of in the short term? You have been on this from the very start, great job! What is your outlook in the near and long term for this?
2Q guidance was strong. 3Q there's the new mosfet line and increased supply. 4Q is soft launch grid-agnostic IQ8/Ensemble. 3Q/4Q are traditionally strong quarters. And by year end possibly full ramp up of Sunpower's deal. Looks to me they will be increasing revenue all year and into 2020. Given Badri's discipline earnings should surprise. Long term, enphase has superior technology, not just high quality. All you have to look at are their warranty costs and compare those with competitors. With IQ8 costs will come down considerably. Badri may simply opt for margins expansion or drop the ASP and enter new markets. String inverters VS microinverters -for residential solar- will have a difficult time competing.

One possible risk is their new Mexican production line. Hopefully, Flex has this under control.

I bought too many back then, so not adding. Sold 10% yesterday only because the portfolio is unbalanced with Enphase stake being too big. I will continue to hold the remaining shares.
Title: Re: ENPH - Enphase Energy
Post by: rros on May 02, 2019, 07:39:08 AM
respect not only to this investment but the fact that you kept this thread updated for two years while everybody ignored it. truly heroic thread
Thank you.
Title: Re: ENPH - Enphase Energy
Post by: rros on July 30, 2019, 01:38:31 PM
Hopefully, some of the readers are still long. I am. What a rocket, a 20-bagger! An amazing earnings report today :)
Still room to run. Do not sell.
Title: Re: ENPH - Enphase Energy
Post by: alpha on July 30, 2019, 03:20:50 PM
Wish I had conviction when it was trading below a dollar  :'(
Title: Re: ENPH - Enphase Energy
Post by: valuedontlie on July 30, 2019, 05:04:26 PM
rros -- what else you own? :)
Title: Re: ENPH - Enphase Energy
Post by: maunilpatel on July 30, 2019, 07:41:23 PM
Good quarter but the q3 guidance is even better!! Can not thank rros enough! Thanks a million for mentioning this company here.

This multibagger is going to be life-changing for me.
Title: Re: ENPH - Enphase Energy
Post by: Gregmal on July 30, 2019, 07:52:47 PM
Heroic call.

Most here where too busy getting rich in BRK, FRFH, and SHLD... Congrats
Title: Re: ENPH - Enphase Energy
Post by: jrallen81 on July 31, 2019, 11:14:10 AM
agreed, massive Hero call. Is SEDG worth a look here? or is all of ENPH's success due to company-level factors.
Title: Re: ENPH - Enphase Energy
Post by: Spekulatius on July 31, 2019, 05:29:31 PM
agreed, massive Hero call. Is SEDG worth a look here? or is all of ENPH's success due to company-level factors.

Agree, I didn’t buy it. Too risk averse. Great call. I hope I get on board with the next one Microcap turnaround investing is hard - my guess is that 3/4 flame out. Those that make it can make a lot pf money.
Title: Re: ENPH - Enphase Energy
Post by: rros on July 31, 2019, 08:04:15 PM
agreed, massive Hero call. Is SEDG worth a look here? or is all of ENPH's success due to company-level factors.
SEDG's technology will become a dinosaur but the company will not disappear. They are great at making money and figuring out ways to yet keep expanding. But enphase has a chance to become the standard/default in residential solar creating an entire new category with their off-grid IQ8.
Title: Re: ENPH - Enphase Energy
Post by: rros on July 31, 2019, 08:10:33 PM
rros -- what else you own? :)
Amyris.
But I am too busy now for a write-up. And just like it was for enphase -and like Spekulatius has said- these plays can stink.
A must to understand their technology. And prepare yourself to go through chaotic times and long term holding periods. They start to come together one broken piece at a time.
Title: Re: ENPH - Enphase Energy
Post by: rainman on July 31, 2019, 09:36:31 PM
I bought a bit. I follow ENPH from over $15 to 80 cents, until rros call.
I work for semi company. So I can understand ENPH technology, which helps me a lot.
Title: Re: ENPH - Enphase Energy
Post by: Eye4Valu on July 31, 2019, 10:04:28 PM
rros -- what else you own? :)
Amyris.
But I am too busy now for a write-up. And just like it was for enphase -and like Spekulatius has said- these plays can stink.
A must to understand their technology. And prepare yourself to go through chaotic times and long term holding periods. They start to come together one broken piece at a time.

Can you give a synopsis on Amyris?
Title: Re: ENPH - Enphase Energy
Post by: rros on August 01, 2019, 06:02:07 AM
rros -- what else you own? :)
Amyris.
But I am too busy now for a write-up. And just like it was for enphase -and like Spekulatius has said- these plays can stink.
A must to understand their technology. And prepare yourself to go through chaotic times and long term holding periods. They start to come together one broken piece at a time.

Can you give a synopsis on Amyris?
What matters: Amyris can produce specific molecules, in scale, with the highest purity and at the lowest cost. I will expand later. This Monday, the company presents an update on its business via webcast as they are behind on financial reporting. This is a technology that took 10 years to develop and about $1 billion. Enphase's took less time on developing theirs and about $100 million. And yes, there is a reason why they trade at $3.
Title: Re: ENPH - Enphase Energy
Post by: rros on August 01, 2019, 06:04:47 AM
I bought a bit. I follow ENPH from over $15 to 80 cents, until rros call.
I work for semi company. So I can understand ENPH technology, which helps me a lot.
Hopefully, you doubled down? Do you also feel their technology has key advantages to string inverters?
Title: Re: ENPH - Enphase Energy
Post by: rainman on August 01, 2019, 06:30:40 AM
I just followed it from $15, not bought until TJ Rogers involved.

Yes, I think micro inverter is better. But it is also more expensive.

It seems the new management controlled the cost very well.

 
Title: Re: ENPH - Enphase Energy
Post by: Eye4Valu on August 01, 2019, 09:19:57 AM
rros -- what else you own? :)
Amyris.
But I am too busy now for a write-up. And just like it was for enphase -and like Spekulatius has said- these plays can stink.
A must to understand their technology. And prepare yourself to go through chaotic times and long term holding periods. They start to come together one broken piece at a time.

Can you give a synopsis on Amyris?
What matters: Amyris can produce specific molecules, in scale, with the highest purity and at the lowest cost. I will expand later. This Monday, the company presents an update on its business via webcast as they are behind on financial reporting. This is a technology that took 10 years to develop and about $1 billion. Enphase's took less time on developing theirs and about $100 million. And yes, there is a reason why they trade at $3.

Thanks! Am interested to learn more when you have time.
Title: Re: ENPH - Enphase Energy
Post by: compoundvalue on August 11, 2019, 08:26:28 AM
Have taken a quick look at Amyris. Really interesting situation. Quite clear that the upside is huge but boy what a history this mgmt has. They have managed to over promise and under deliver so many times in the past. Ho do you get comfortable with mgmt and how can one determine (if at all) that “this time is different”?
Title: Re: ENPH - Enphase Energy
Post by: Gregmal on September 12, 2019, 01:45:57 PM
Citron short report out on this and SEDG.
Title: Re: ENPH - Enphase Energy
Post by: awindenberger on September 12, 2019, 06:21:23 PM
Citron short report out on this and SEDG.

I tend to agree with Citrons assertions that ENPH current price is stretched, but even if Generac can quickly take 10% of the market SEDG, ENPH and Generac can all three grow very quickly. Solar+Storage will explode over the next few years and having some more competition to lower pricing a bit will simply lead to more sales for everyone.
Title: Re: ENPH - Enphase Energy
Post by: montizzle on November 04, 2019, 08:54:16 AM
Decent correction here in the past few weeks, might start getting back into a more reasonable price range
Title: Re: ENPH - Enphase Energy
Post by: Gregmal on February 19, 2020, 10:13:31 AM
Glorious. $55 Congrats on this one again.
Title: Re: ENPH - Enphase Energy
Post by: montizzle on June 17, 2020, 03:12:20 PM
Short report by Prescience Point alleging that Enphase is fradulently reporting revenues. Stock down 26% on the day to ~$39

https://www.benzinga.com/analyst-ratings/analyst-color/20/06/16279134/enphase-energy-short-seller-doubles-down-on-fraud-allegations-following-third-party