Shares of Enphase Energy (NASDAQ:) have declined 13.5% year-to-date, after delivering stellar price improvements over the past year. We believe the company’s overvaluation and inadequate financial strength might be a cause of concern for the stock going forward. On top of that, given the mixed growth prospects of the renewable energy sector, ENPH might retreat further. Read more to find out.Based in Fremont, Calif., Enphase Energy, Inc. (ENPH) is a manufacturer and seller of home energy solutions and semiconductor-based microinverters for the solar photovoltaic industry in the United States and internationally. ENPH’s stock price has advanced 299% over the past year because of solid investments made in the solar sector and optimism surrounding the clean and carbon-free energy drive around the globe.
However, shares of ENPH have declined 13.5% year-to-date and 7.8% over the past month.
While the clean energy industry gained traction in 2020 and was one of the top performing industries, its long-term outlook is uncertain. Although ENPH’s strategic partnership could help it expand its solar business further, the company is trading at a significantly high valuation, which could result in the stock turning investors off in the near term.
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