First Solar (NASDAQ: FSLR) and Enphase Energy (NASDAQ:ENPH) are both oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, profitabiliy, analyst recommendations, institutional ownership, dividends, valuation and earnings.

Institutional & Insider Ownership

60.8% of First Solar shares are held by institutional investors. Comparatively, 25.7% of Enphase Energy shares are held by institutional investors. 0.4% of First Solar shares are held by insiders. Comparatively, 17.4% of Enphase Energy shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
First Solar -18.80% 6.43% 4.94%
Enphase Energy -22.98% -757.76% -36.10%

Risk and Volatility

First Solar has a beta of 1.94, indicating that its stock price is 94% more volatile than the S&P 500. Comparatively, Enphase Energy has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for First Solar and Enphase Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Solar 1 15 8 0 2.29
Enphase Energy 0 3 3 0 2.50

First Solar presently has a consensus target price of $43.70, suggesting a potential downside of 8.92%. Enphase Energy has a consensus target price of $2.10, suggesting a potential upside of 126.78%. Given Enphase Energy’s stronger consensus rating and higher possible upside, analysts plainly believe Enphase Energy is more favorable than First Solar.

Valuation & Earnings

This table compares First Solar and Enphase Energy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
First Solar $2.57 billion 1.95 $296.64 million ($4.84) -9.91
Enphase Energy $313.22 million 0.25 -$44.98 million ($1.27) -0.73

First Solar has higher revenue and earnings than Enphase Energy. First 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

First Solar beats Enphase Energy on 9 of the 13 factors compared between the two stocks.

First Solar Company Profile

First Solar, Inc. is a provider of photovoltaic (PV) solar energy solutions. The Company designs, manufactures and sells PV solar modules with a thin-film semiconductor technology. The Company also develops, designs, constructs and sells PV solar power systems that primarily use the modules it manufactures. It operates through two segments: components and systems. The components segment is engaged in the design, manufacture and sale of cadmium telluride (CdTe) solar modules, which convert sunlight into electricity. The systems segment includes the development, construction, operation and maintenance of PV solar power systems, which primarily use its solar modules. In addition, the Company provides operations and maintenance (O&M) services to system owners that use solar modules manufactured by it or by third-party manufacturers. The Company’s solar modules had an average rated power per module of approximately 114 watts, as of December 31, 2016.

Enphase Energy Company Profile

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.

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