Critical Survey: Enphase Energy (NASDAQ:ENPH) and FTC Solar (NASDAQ:FTCI)

Enphase Energy (NASDAQ:ENPH) and FTC Solar (NASDAQ:FTCI) are both energy companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, earnings, risk and dividends.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Enphase Energy	11.78%	24.55%	6.63%
FTC Solar	-73.04%	-262.78%	-55.79%

Risk & Volatility

Enphase Energy has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, FTC Solar has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Enphase Energy and FTC Solar, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Enphase Energy	12	13	10	0	1.94
FTC Solar	0	2	1	0	2.33

Enphase Energy presently has a consensus target price of $55.48, suggesting a potential upside of 47.15%. FTC Solar has a consensus target price of $4.25, suggesting a potential downside of 32.00%. Given Enphase Energy’s higher probable upside, equities analysts clearly believe Enphase Energy is more favorable than FTC Solar.

Institutional and Insider Ownership

72.1% of Enphase Energy shares are owned by institutional investors. Comparatively, 45.4% of FTC Solar shares are owned by institutional investors. 3.1% of Enphase Energy shares are owned by company insiders. Comparatively, 21.0% of FTC Solar shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Enphase Energy and FTC Solar”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Enphase Energy	$1.33 billion	3.71	$102.66 million	$1.28	29.45
FTC Solar	$47.35 million	1.96	-$48.61 million	($3.92)	-1.59

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

Summary

Enphase Energy beats FTC Solar on 12 of the 14 factors compared between the two stocks.

About Enphase Energy

Enphase Energy, Inc., together with its subsidiaries, designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. The company offers semiconductor-based microinverter, which converts energy at the individual solar module level and combines with its proprietary networking and software technologies to provide energy monitoring and control. It also provides microinverter units and related accessories, an IQ gateway; IQ batteries; the cloud-based Enlighten monitoring service; storage solutions; and electric vehicle charging solutions, as well as design, proposal, permitting, and lead generation services. The company sells its solutions to solar distributors; and directly to large installers, original equipment manufacturers, strategic partners, and homeowners, as well as through its legacy product upgrade program or online store. Enphase Energy, Inc. was incorporated in 2006 and is headquartered in Fremont, California.

About FTC Solar

FTC Solar, Inc. engages in the provision of solar tracker systems, software, and engineering services in the United States, Asia, Europe, the Middle East, North Africa, South Africa, and Australia. The company offers a self-powered, two-panel in-portrait, and single-axis tracker solution under the Voyager brand name; and a one module-in-portrait solar tracker solution under the Pioneer brand name. Its customers include project developers and solar asset owners, as well as engineering, procurement, and construction contractors that design and build solar energy projects. The company was incorporated in 2017 and is headquartered in Austin, Texas.