Yahoo Finance FSLR vs. ENPH: Which Stock Is the Better Value Option?
Investors with an interest in Solar stocks have likely encountered both First Solar (FSLR) and Enphase Energy (ENPH). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
First Solar and Enphase Energy are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FSLR has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
FSLR currently has a forward P/E ratio of 11.77, while ENPH has a forward P/E of 35.97. We also note that FSLR has a PEG ratio of 0.27. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ENPH currently has a PEG ratio of 2.08.
Another notable valuation metric for FSLR is its P/B ratio of 2.55. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ENPH has a P/B of 16.80.
These metrics, and several others, help FSLR earn a Value grade of B, while ENPH has been given a Value grade of D.
FSLR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FSLR is likely the superior value option right now.
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First Solar, Inc. (FSLR) : Free Stock Analysis Report
Enphase Energy, Inc. (ENPH) : Free Stock Analysis Report
