Enphase Energy (ENPH) & Sunrun (RUN) Critical Comparison

Enphase Energy (NASDAQ: ENPH) and Sunrun (NASDAQ:RUN) are both small-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Earnings and Valuation

This table compares Enphase Energy and Sunrun’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Enphase Energy $308.74 million 0.38 -$35.28 million ($1.05) -1.33
Sunrun $474.58 million 1.22 -$59.81 million $0.78 7.01

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

Profitability

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

Net Margins Return on Equity Return on Assets
Enphase Energy -21.81% -1,232.10% -30.49%
Sunrun 17.65% 8.76% 2.44%

Insider & Institutional Ownership

19.2% of Enphase Energy shares are held by institutional investors. Comparatively, 74.0% of Sunrun shares are held by institutional investors. 17.4% of Enphase Energy shares are held by insiders. Comparatively, 24.1% of Sunrun shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Enphase Energy has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500. Comparatively, Sunrun has a beta of -0.71, indicating that its stock price is 171% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Enphase Energy and Sunrun, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enphase Energy 0 3 4 0 2.57
Sunrun 0 2 4 0 2.67

Enphase Energy currently has a consensus target price of $2.08, suggesting a potential upside of 48.81%. Sunrun has a consensus target price of $10.80, suggesting a potential upside of 97.44%. Given Sunrun’s stronger consensus rating and higher possible upside, analysts plainly believe Sunrun is more favorable than Enphase Energy.

Summary

Sunrun beats Enphase Energy on 10 of the 12 factors compared between the two stocks.

About Enphase Energy

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.

About Sunrun

Sunrun Inc. is engaged in the design, development, installation, sale, ownership and maintenance of residential solar energy systems (Projects) in the United States. The Company is engaged in providing solar energy services and products to its customers. As of December 31, 2016, it operated a fleet of residential solar energy systems in the United States, with approximately 134,000 customers across 16 states, as well as the District of Columbia. The Company sells to homeowners over the phone, in the field through canvassing and in-home sales and through retail sales channels through its strategic partners. The solar service offerings are provided through its lease and power purchase agreements. It sells solar service offerings and installs solar energy systems for homeowners through its direct-to-consumer channel. It sells solar energy systems to homeowners, as well as related products, such as solar panels, inverters, racking systems and other solar-related equipment to resellers.

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