Sunworks (NASDAQ: SUNW) and Enphase Energy (NASDAQ:ENPH) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, earnings, risk, institutional ownership, profitability and analyst recommendations.

Insider and Institutional Ownership

5.5% of Sunworks shares are held by institutional investors. Comparatively, 25.7% of Enphase Energy shares are held by institutional investors. 5.6% of Sunworks shares are held by insiders. Comparatively, 17.4% of Enphase Energy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Sunworks -15.47% -53.89% -27.77%
Enphase Energy -21.81% -1,232.10% -30.49%

Valuation and Earnings

This table compares Sunworks and Enphase Energy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Sunworks $81.34 million 0.47 -$10.35 million N/A N/A
Enphase Energy $313.22 million 0.22 -$44.98 million ($1.05) -0.78

Sunworks has higher revenue, but lower earnings than Enphase Energy.

Analyst Ratings

This is a summary of recent ratings and target prices for Sunworks and Enphase Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sunworks 0 2 1 0 2.33
Enphase Energy 0 3 3 0 2.50

Sunworks presently has a consensus price target of $2.75, indicating a potential upside of 61.76%. Enphase Energy has a consensus price target of $2.10, indicating a potential upside of 156.57%. Given Enphase Energy’s stronger consensus rating and higher possible upside, analysts clearly believe Enphase Energy is more favorable than Sunworks.

Volatility & Risk

Sunworks has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500. Comparatively, Enphase Energy has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Sunworks Company Profile

Sunworks, Inc., formerly Solar3D, Inc., provides photo voltaic (PV) based power systems for the residential, commercial and agricultural markets in California and Nevada. The Company, through its operating subsidiaries, designs, arranges financing, integrates, installs and manages systems ranging in size from 2 kilowatt (KW) for residential loads to multi megawatts (MW) systems for larger commercial projects. The Company’s commercial installations include office buildings, manufacturing plants, warehouses and agricultural facilities, such as farms, wineries and dairies. The Company provides a range of installation services to its solar energy customers, including design, system engineering, procurement, permitting, construction, grid connection, warranty, system monitoring and maintenance. The Company has installed over 850 systems in California and Nevada.

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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