Enphase Energy (ENPH) versus SolarCity Corp (SCTY) Financial Contrast

SolarCity Corp (NASDAQ: SCTY) and Enphase Energy (NASDAQ:ENPH) are both energy companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, earnings, dividends, institutional ownership, valuation, profitability and analyst recommendations.

Valuation and Earnings

This table compares SolarCity Corp and Enphase Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
SolarCity Corp N/A N/A N/A ($0.29) -70.14
Enphase Energy $308.74 million 0.24 -$35.28 million ($1.05) -0.83

SolarCity Corp has higher revenue, but lower earnings than Enphase Energy. SolarCity Corp is trading at a lower price-to-earnings ratio than Enphase Energy, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

40.0% of SolarCity Corp shares are owned by institutional investors. Comparatively, 25.7% of Enphase Energy shares are owned by institutional investors. 36.4% of SolarCity Corp shares are owned by insiders. Comparatively, 17.4% of Enphase Energy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares SolarCity Corp and Enphase Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SolarCity Corp -112.36% 22.92% -10.69%
Enphase Energy -21.81% -1,232.10% -30.49%

Analyst Recommendations

This is a breakdown of current ratings and target prices for SolarCity Corp and Enphase Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SolarCity Corp 2 5 0 0 1.71
Enphase Energy 0 3 3 0 2.50

SolarCity Corp currently has a consensus price target of $27.40, indicating a potential upside of 34.71%. Enphase Energy has a consensus price target of $2.10, indicating a potential upside of 142.33%. Given Enphase Energy’s stronger consensus rating and higher probable upside, analysts plainly believe Enphase Energy is more favorable than SolarCity Corp.

Volatility & Risk

SolarCity Corp has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500. Comparatively, Enphase Energy has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Summary

SolarCity Corp beats Enphase Energy on 6 of the 11 factors compared between the two stocks.

SolarCity Corp Company Profile

SolarCity Corporation is a United States-based solar provider. The Company is primarily engaged in the design, manufacture, installation and sale or lease of solar energy systems to residential and commercial customers, or sale of electricity generated by solar energy systems to customers. It operates through solar energy products and services segment. It integrates the sales, engineering, manufacturing, installation, monitoring, maintenance and financing of its distributed solar energy systems. It offers its customers the option to either purchase and own solar energy systems or to purchase the energy that its solar energy systems produce through various contractual arrangements. It installs solar energy system at its customer’s premises and charge the customer a monthly fee for the power that its system produces. Its products, services and technologies include solar energy systems, customer agreements, grid control/energy storage systems, Zep Solar mounting systems and software.

Enphase Energy Company Profile

Enphase Energy, Inc. is a provider of energy management solutions. The Company is engaged in designing, developing, manufacturing and selling microinverter systems for the solar photovoltaic industry. Its semiconductor-based microinverter system converts direct current (DC) electricity to alternating current (AC) electricity. Its microinverter system consists of three components: Enphase microinverters, an Envoy gateway and Enlighten cloud-based software. Its Enphase microinverters provide power conversion at the individual solar module level by a digital architecture that incorporates custom application specific integrated circuits (ASIC), specialized power electronics devices, and an embedded software subsystem. Envoy bi-directional communications gateway provides collecting and sending data to Enlighten software. Enlighten cloud-based software provides the capabilities to remotely monitor, manage, and maintain an individual system or a fleet of systems.

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