Enphase Energy (ENPH) has fallen more than 14% in the past week as concern surrounding high interest rates continues to mount. This has prompted sharp sell-offs, which include insider selling.

Interest rates are at a 23-year high today, and the Fed won’t take action anytime soon as consumer and wholesale inflation are both concerns of their own right now. But why does this matter for a company like Enphase?

The solar provider is struggling to stir up consumer demand right now and the high costs to finance a solar system are certainly not helping. Those who are interested in solar are not willing to pay a premium to finance the investment.

What’s really concerning for investors is that this issue isn’t limited to the US economy, either. European sales have slumped over the past year as well.

However, CEO Badri Kothandaraman is optimistic that the first quarter will represent a tipping point, at which the solar industry should bottom out and rebound through the remainder of the year. Borrowing costs should fall – but we’ve been hearing that for a while, and it’s yet to come to fruition. 

Interest rates aside, Enphase also faces the challenge of addressing insider selling. Just last week an SEC filing showed VP and CCO David Ranhoff sold a whopping 5,000 shares of ENPH.

While this is a drop in the bucket compared to the 124,948 remaining shares in his portfolio, it’s worth noting that company insiders as a whole have sold more shares than they have purchased in the past 3 months. 

This begs the question, should retail ENPH shareholders follow suit and offload this stock? Not so fast. We’ve taken a look at this stock through the VectorVest stock forecasting software and found 3 reasons to consider holding your ground.

ENPH Has Good Upside Potential and Fair Safety, But Poor Timing is Holding it Back

VectorVest simplifies your trading strategy by giving you all the insights you need to make clear, calculated decisions in ratings. These are relative value (RV), relative safety (RS), and relative timing (RT). 

Each sits on its own scale of 0.00-2.00 with 1.00 being the average, making interpretation quick and easy. But it gets even better. You’re offered a buy, sell, or hold recommendation based on the overall VST rating for any given stock at any given time. As for ENPH, here’s what we found:

  • Good Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (forecasted 3 years out), AAA corporate bond rates, and risk. It offers much better insight than your standard comparison of price to value. EMNP has a good RV rating of 1.12. The stock is slightly undervalued right now with a current value of $113/share.
  • Fair Safety: The RS rating is a risk indicator. It’s calculated by analyzing the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. The RS rating of 0.99 is just below the average and considered fair for ENPH.
  • Poor Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year to paint the full picture for investors. This is the one thing holding ENPH back, as its RT rating of 0.80 is poor.

The overall VST rating of 0.97 is just below the average but deemed fair nonetheless. ENPH is currently rated a HOLD - but we encourage you to dig a bit deeper yourself and find out exactly what your next move should be through a free stock analysis at VectorVest today!

Want These Types of Insights at Your Fingertips so You Can Win More Trades?

Use VectorVest to analyze any stock free. VectorVest is the only stock analysis tool and portfolio management system that analyzes, ranks and graphs over 18,000 stocks each day for value, safety, and timing and gives a clear buy, sell or hold rating on every stock, every day.

VectorVest advocates buying safe, undervalued stocks, rising in price. ENPH is down 14% in the past week as concerns surrounding the implications of high-interest rates and insider selling mount. The stock does have poor timing holding it back, but it also has good upside potential and fair safety.

Before you invest, check VectorVest! Click here to ANALYZE ANY STOCK FREE and see our system in action!