As of May 23, 2025, Enphase Energy Inc has a Discounted Cash Flow (DCF) derived fair value of $29.09 per share. With the current market price at $38.01, this represents a potential upside of -23.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $13.20 |
| DCF Fair Value (10-year) | $29.09 |
| Potential Upside (5-year) | -65.3% |
| Potential Upside (10-year) | -23.4% |
| Discount Rate (WACC) | 7.5% - 10.2% |
Revenue is projected to grow from $1330 million in 12-2024 to $4130 million by 12-2034, representing a compound annual growth rate of approximately 12.0%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 1330 | 42% |
| 12-2025 | 1577 | 19% |
| 12-2026 | 1775 | 13% |
| 12-2027 | 2002 | 13% |
| 12-2028 | 2338 | 17% |
| 12-2029 | 2649 | 13% |
| 12-2030 | 2929 | 11% |
| 12-2031 | 3183 | 9% |
| 12-2032 | 3457 | 9% |
| 12-2033 | 3750 | 8% |
| 12-2034 | 4130 | 10% |
Net profit margin is expected to improve from 8% in 12-2024 to 20% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 103 | 8% |
| 12-2025 | 157 | 10% |
| 12-2026 | 215 | 12% |
| 12-2027 | 283 | 14% |
| 12-2028 | 376 | 16% |
| 12-2029 | 475 | 18% |
| 12-2030 | 535 | 18% |
| 12-2031 | 593 | 19% |
| 12-2032 | 656 | 19% |
| 12-2033 | 724 | 19% |
| 12-2034 | 811 | 20% |
with a 5-year average of $53 million. Projected CapEx is expected to maintain at approximately 3% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 59 |
| 12-2026 | 59 |
| 12-2027 | 63 |
| 12-2028 | 55 |
| 12-2029 | 65 |
| 12-2030 | 74 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 75 |
| Days Inventory | 63 |
| Days Payables | 38 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 119 | 20 | 37 | 27 | 35 |
| 2026 | 217 | 36 | 56 | 59 | 65 |
| 2027 | 288 | 48 | 63 | 49 | 128 |
| 2028 | 371 | 64 | 74 | 73 | 161 |
| 2029 | 480 | 80 | 84 | 74 | 243 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 13.20 | -65.3% |
| 10-Year DCF (Growth) | 29.09 | -23.4% |
| 5-Year DCF (EBITDA) | 18.82 | -50.5% |
| 10-Year DCF (EBITDA) | 31.48 | -17.2% |
Is Enphase Energy Inc (ENPH) a buy or a sell? Enphase Energy Inc is definitely a sell. Based on our DCF analysis, Enphase Energy Inc (ENPH) appears to be overvalued with upside potential of -23.4%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $38.01.