The shares of Enphase Energy, Inc. have increased by more than 392.18% this year alone. The shares recently went down by -2.18% or -$0.52 and now trades at $23.28. The shares of Kirkland’s, Inc. (NASDAQ:KIRK), has slumped by -85.52% year to date as of 09/10/2019. The shares currently trade at $1.38 and have been able to report a change of -1.43% over the past one week.
The stock of Enphase Energy, Inc. and Kirkland’s, Inc. were two of the most active stocks on Tuesday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.
Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. ENPH has an EBITDA margin of 9.66%, this implies that the underlying business of ENPH is more profitable. The ROI of ENPH is 0.20% while that of KIRK is 2.20%. These figures suggest that KIRK ventures generate a higher ROI than that of ENPH.
The value of a stock is ultimately determined by the amount of cash flow that the investors have available. Over the last 12 months, ENPH’s free cash flow per share is a positive 0.Liquidity and Financial Risk
The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for ENPH is 2.40 and that of KIRK is 0.90. This implies that it is easier for ENPH to cover its immediate obligations over the next 12 months than KIRK. The debt ratio of ENPH is 0.88 compared to 0.00 for KIRK. ENPH can be able to settle its long-term debts and thus is a lower financial risk than KIRK.
ENPH currently trades at a forward P/E of 24.53, a P/B of 22.60, and a P/S of 6.99 while KIRK trades at a P/B of 0.19, and a P/S of 0.03. This means that looking at the earnings, book values and sales basis, ENPH is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.Analyst Price Targets and Opinions
The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of ENPH is currently at a -24% to its one-year price target of 30.63. Looking at its rival pricing, KIRK is at a -52.41% relative to its price target of 2.90.
When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), ENPH is given a 2.20 while 2.00 placed for KIRK. This means that analysts are more bullish on the outlook for ENPH stocks.Insider Activity and Investor Sentiment
Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for ENPH is 2.37 while that of KIRK is just 8.11. This means that analysts are more bullish on the forecast for ENPH stock.
The stock of Enphase Energy, Inc. defeats that of Kirkland’s, Inc. when the two are compared, with ENPH taking 4 out of the total factors that were been considered. ENPH happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, ENPH is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for ENPH is better on when it is viewed on short interest.