Should you invest in Enphase energy stock? This solar company has gotten absolutely hammered over the past couple of years and not in the fun way.

They have seen revenues decline along with the stock share price, but according to Enfey's CEO, the first couple of years and not in the fun way. They're seeing revenues decline along with the stock share price,

but according to Nphase's CEO, the first quarter of 2024 should be an inflection point.

They're expecting to put the worst behind them and it forbid nothing but growth from here.

Now, we're going to go ahead and dive into the numbers and let you know how bad that bullshit smells,

or if this is actually thought that should be on your radar.

Welcome to the first edition of Wso's three minute peel this is where we peel back the numbers on any given specific company in less than three minutes and let you know we should be thinking about going forward of course we're also going to finish things off with a rating one to five bananas five being put all your money into this thing right now and one being call your parents and tell

them to short the stock because they're going to make a ton of money we'll let you know exactly

what's going on today we're focusing on n phase my name is david let's go ahead and dive right in

all right so with a company like nphase they sell micro inverters in the solar industry now

they sell primarily to manufacturers and other oEM-style businesses, kind of a

picks and shovel play on the consumer-based solar industry. These guys aren't interacting directly

with consumers, but they are selling to manufacturers that then sell those panels to those consumers.

So consumer trends are still going to impact this company extremely. Now, what we know about

the solar industry is that it is very linked to interest rates. Every consumer that puts solar on their roof, they likely did so through debt financing. So over the past couple of years, seeing debt costs spike in the United States and around the rest of the globe, it's no surprise to see this revenue decline. This is kind of the best kind of revenue decline that we can see for a company when it's a macroeconomic related factor, not idiosyncratic, not something that the company is doing to itself. But when we see revenues decline like this, the first question that comes to my mind at least is what exactly is going on with their inventories. Now, if they are still able to move inventories, that's going to be a great sign. If not, that's terrible because not only is that a reduction in revenue, it's also an increase in cost, so that's going to squeeze margins even more so, because companies would have to then store a lot of this inventory, destroy it, or whatever else it may be. And as we can see, inventory turnover is at an all-time low for the stop. Now, in order to get constructive and

view this in a more positive light going forward, we don't necessarily need inventory turnover

to return to these previous peaks. We just need to start it to move back in the right direction.

If it starts moving back higher, analysts are going to see that and the stock's going to start

to warrant a premium or at least start to kind of respect the fact that demand is returning. Now, what we want to see here is one, if that demand is going to return, two, can the company survive until that demand returns if it ever does? So the first thing that we're going to do is pull up the company's quarterly report, or at least the press release that came along with their latest quarterly report for Q4 of 2023. So as we can see, we have $302.6 million in revenue for the quarter that came in at the

lower end of estimates. It still did beat the absolute lowest range, but that's not entirely

something we want to be too excited about. We're seeing gross margins, 48.5, 50.3 on gap and non-gap

basis. That is a little bit of a reduction as well,

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