Enphase Energy (SYM: ENPH) is showing big signs of life today.
Up about $10.60, we believe ENPH could retest $140 next from its last traded price of $114.21.
Granted, recent earnings and revenue did fall short of estimates. Second quarter adjusted EPS of 43 cents on revenue of $303.5 million was below expectations for 49 cents on revenue of $309.7 million. However, according to CEO Badri Kothandaraman, the company is turning a corner. Plus, once the Federal Reserve does cut interest rates, ENPH could benefit.
Right now, according to the CEO, higher interest rates have hurt the business. After all, “Consumers are less likely to make big purchases like solar roofs, which can cost upwards of $20,000, when they have to pay more to finance them,” says Barron’s.
In addition, improvement in the U.S. market, specifically in California, is a “light at the end of the tunnel,” according to Canaccord Genuity analyst Austin Moeller.
“The key takeaway, in our view, is that the California market is stabilizing and should be viewed by investors as nearing an inflection point, especially if a September rate cut generates additional tailwinds for solar installs,” Moeller added, as quoted by Barron’s.
