This energy technology company announced powerful quarterly results after the close on Tuesday, exceeding expectations for revenue and earnings. The shares are up double digits in after hours trading, and the powerful long-term growth story remains fully intact. In fact, the business is accelerating—a very good sign. We are long the shares.
Enphase (a large position in our Disciplined Growth Portfolio) makes microinverters used in solar panel energy systems and it has been growing extremely rapidly for years. We are encouraged by the latest quarterly results, and here are a couple quotes from the press release that strengthen our conviction going forward:
We are adding additional manufacturing capacity in the United States due to the strong global demand for our products as well as the incentives related to the Inflation Reduction Act (IRA). We plan to begin domestic manufacturing in the second quarter of 2023 with a new contract manufacturing partner and in the second half of 2023 with our two existing contract manufacturing partners.
also:
We began manufacturing Enphase-branded electric vehicle (EV) chargers at our contract manufacturing facility in Mexico, helping us to increase capacity and reduce costs. We expect to introduce IQ smart EV chargers to customers in the United States in the first half of 2023. They will provide connectivity and control, enabling use cases like green charging and allowing homeowners visibility into the operation of their Enphase solar-plus-storage-plus-EV system through the Enphase® App.
Despite the strong gains, Enphase remains a highly attractive long-term growth stock. In fact, the shares are now well below their 52-week highs, despite the fact that growth continues to accelerate, return on equity is extremely high, and net profits are also strong (the company has very healthy profitability).
We are long Enphase in our Disciplined Growth portfolio, and we expect to continue to own the shares for years.