Just over a week ago Enphase, a $6bn provider of key widgets for the solar market, reported its fourth quarter numbers for 2019.
The results were glorious. Revenues for the year almost doubled, while gross margins expanded 5.5 percentage points, pushing net income up to $161m, versus a loss of $12m in 2018. It marked a remarkable turnaround for Enphase and its chief executive Badri Kothandaraman, who took the reins of the company in 2017 when its outlook looked bleak.
The shifting fortunes of the company have also made its investors rich. Since New Year’s Day 2019, its shares are up 891 per cent:
Remarkable growth generates scepticism among those who believe a sexy pitch is often too good to be true. Despite its meteoric price action, 19 per cent of Enphase’s shares are currently sold short, according to S&P Global Market Intelligence. Previous detractors include Andrew Left’s Citron Research, who took a swing late last year.
The shorties are not the only ones who have raised an eyebrow. Its main competitor, SolarEdge, has also questioned Enphase’s growth. On 2019’s second quarter conference call former chief executive, the late Guy Sella, discussed Enphase’s growth versus its reported market share. He drew attention in particular to Enphase’s purchase of rival SunPower’s inverter business for $15m in the summer of 2018 (with our emphasis, and via Sentieo):
So as we said in the past, there is no ability for a company to measure market share of newly installed systems. The only one who does it constantly is Greentech Media. Since Q1 2018, the Greentech Media show steady growth of SolarEdge market share in the U.S. residential market from 45.7% in Q1 2018 to 59.5%