Since the release of its initial report on Enphase, Prescience Point has identified numerous additional red flags which further call into question the reliability of the company’s financial statements. Prescience Point continues to believe that Enphase shares are currently worth about $1.00 on a fundamental basis.
- Following Q2 2018 earnings and other recent developments, Prescience Point continues to believe that Enphase Energy’s purported turnaround under its new CEO is a sham.
- Our analysis of ENPH’s Q2’18 results indicates a continued increase in the severity of accounting shenanigans that inflate financial performance.
- Management tried to explain away some of the red flags highlighted in our Initiation Report; however, management’s explanations in some cases conflict with statements previously made on the record and in other cases defy logic.
- Despite the use of aggressive and potentially improper accounting practices to inflate financial performance, ENPH still missed Q2 consensus estimates and whiffed on guidance. The 12.9% and 8.9% YoY decline in ENPH’s Q2’18 inverter volume and adjusted revenue, respectively, indicate that its business is deteriorating at a faster pace than we initially thought.
- According to sources, former SunEdison CEO Ahmad Chatila is currently working for ENPH. ENPH appears to have adopted many of the same practices which ultimately led to SUNE’s downfall.
- Prescience Point reiterates our estimate that Enphase stock is worth ~$1/share on a fundamental basis, implying 80% downside.