@nathanworden since Enph became profitable 4 years ago, it’s twice traded for under 35 x earnings. Covid crash and now.

@rpinvestments I just pulled up $ENPH p/e ratio over time on Koyfin. And yep, you're right. The cheapest $ENPH got was March 2020 when it traded at a 19.5x p/e

@rpinvestments So it could still fall farther.... but that was Covid, and the risk reward is definitely in ENPH's favor.

@nathanworden correct. But that was a black swan. Lots of sales March of 2020.

@rpinvestments What if 35x p/e is what's fair to pay for this stock, and the higher p/e that you're comparing to was just the Covid bubble?

@rpinvestments Seems like the 'solar bubble' is popping a bit, so anchoring to p/e's in the 130x range aren't necessarily what it will ever bounce back to.

@charity great observation. Energy, as ansector of the market, has historically been cyclical. Hydrocarbons power most of the worlds energy needs and the price of hydrocarbons fluctuates. Current world electric use is around 24 TWh. In the future we will use more energy. Below is current energy produced by source.

In my lifetime the mix of energy sources won’t look like this. Hopefully it’ll have more wind, solar and nuclear.

Currently residential new solar installations is in a downturn mostly due to cost of capital from raising interest rates. This is causing slowing growth in the solar industry and a lower multiple rating of all solar companies.

But if in a future world with 30% solar energy there are going to need a whole bunch of inverters and batteries. ENPH is the best run solar company on the market today IMO. I’m using a temporary head wind to buy a company for well below its historical PE range.

@charity no. In 4 years ENPH has traded from 20x earnings to 130x earnings. The only 2 times it’s traded “cheaply” at less than 35x earnings where the Covid 19 crash, spring 2020 and today.

@rpinvestments Fair points, appreciate the perspective. I agree that the world will continue to use more energy in the future, and hopefully solar will be a larger and larger source of the consumption