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Enphase Energy (NAS:ENPH) WACC %

:14.13% (As of Today)
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As of today (2022-11-26), Enphase Energy's weighted average cost of capital is 14.13%. Enphase Energy's ROIC % is 36.28% (calculated using TTM income statement data). Enphase Energy generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Enphase Energy (NAS:ENPH) WACC % Historical Data

The historical data trend for Enphase Energy's WACC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Enphase Energy Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
WACC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 17.68 10.20 5.52 7.05 8.89

Enphase Energy Quarterly Data
Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22
WACC % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 9.62 8.89 9.29 12.88 14.54

Enphase Energy (NAS:ENPH) WACC % Competitive Comparison

For the Solar subindustry, Enphase Energy's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Enphase Energy (NAS:ENPH) WACC % Distribution

For the Semiconductors industry and Technology sector, Enphase Energy's WACC % distribution charts can be found below:

* The bar in red indicates where Enphase Energy's WACC % falls into.



Enphase Energy WACC % Calculation

The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.

WACC=E/(E + D)*Cost of Equity+D/(E + D)*Cost of Debt*(1 - Tax Rate)

1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Enphase Energy's market capitalization (E) is $43416.707 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Sep. 2022, Enphase Energy's latest two-year average Short-Term Debt & Capital Lease Obligation was $210.1955 Mil and its latest two-year average Long-Term Debt & Capital Lease Obligation was $478.246 Mil. The total Book Value of Debt (D) is $688.4415 Mil.
a) weight of equity = E / (E + D) = 43416.707 / (43416.707 + 688.4415) = 0.9844
b) weight of debt = D / (E + D) = 688.4415 / (43416.707 + 688.4415) = 0.0156

2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 3.69100000%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Enphase Energy's beta is 1.76.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 3.69100000% + 1.76 * 6% = 14.251%

3. Cost of Debt:
GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.
As of Dec. 2021, Enphase Energy's interest expense (positive number) was $45.152 Mil. Its total Book Value of Debt (D) is $688.4415 Mil.
Cost of Debt = 45.152 / 688.4415 = 6.5586%.

4. Multiply by one minus Average Tax Rate:
GuruFocus uses the latest two-year average tax rate to do the calculation. The calculated average tax rate is limited to between 0% and 100%. If the calculated average tax rate is higher than 100%, it is set to 100%. If the calculated average tax rate is less than 0%, it is set to 0%.
The latest Two-year Average Tax Rate is less than 0%, and it's set to 0%.

Enphase Energy's Weighted Average Cost Of Capital (WACC) for Today is calculated as:

WACC=E / (E + D)*Cost of Equity+D / (E + D)*Cost of Debt*(1 - Tax Rate)
=0.9844*14.251%+0.0156*6.5586%*(1 - 0%)
=14.13%

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Enphase Energy  (NAS:ENPH) WACC % Explanation

Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Enphase Energy's weighted average cost of capital is 14.13%. Enphase Energy's ROIC % is 36.28% (calculated using TTM income statement data). Enphase Energy generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.


Be Aware

1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest two-year average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.

2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.

3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.

4. GuruFocus uses last fiscal year end Interest Expense divided by the latest two-year average debt to get the simplified cost of debt.


Related Terms

Enphase Energy (NAS:ENPH) Business Description

Enphase Energy logo
Traded in Other Exchanges
Address
47281 Bayside Parkway, Fremont, CA, USA, 94538
Enphase Energy is a global energy technology company. The company delivers smart, easy-to-use solutions that manage solar generation, storage, and communication on one platform. The company's microinverter technology primarily serves the rooftop solar market and produces a fully integrated solar-plus-storage solution. Geographically, it derives a majority of revenue from the United States.
Executives
Haenggi Jamie Elizabeth director 1501 YAMATO ROAD BOCA RATON FL 33431
Malchow Joseph Ian director C/O ENPHASE ENERGY 47281 BAYSIDE PARKWAY FREMONT CA 94538
Quiroga Moreno Isidoro 10 percent owner VENIDA PRESIDENTE RIESCO 5711 OFICINA 16 LAS CONDES SANTIAGO F3 7550000
South Lake One Llc 10 percent owner 250 WEST 55TH STREET NEW YORK NY 10019
Mcneil Jeff officer: Chief Operating Officer 47281 BAYSIDE PARKWAY FREMONT CA 94538
Yang Mandy officer: Chief Accounting Officer C/O ENPHASE ENERGY, INC. 47281 BAYSIDE PARKWAY FREMONT CA 94538
Branderiz Eric officer: VP & Chief Financial Officer 915 DEGUIGNE DRIVE PO BOX 3453 SUNNYVALE CA 94088-3453
Ranhoff David A officer: VP & Chief Commercial Officer MEMC ELECTRONIC MATERIALS 501 PEARL DRIVE ST. PETERS MO 63366
Kothandaraman Badrinarayanan officer: President & CEO ENPHASE ENERGY INC. 1420 NORTH MCDOWELL BLVD PETALUMA CA 94954
Rodgers Thurman J director 198 CHAMPION COURT SAN JOSE CA 95134
Garcia Humberto officer: VP and CFO 1420 N. MCDOWELL BLVD. PETALUMA CA 94954
Third Point Partners Qualified L P 10 percent owner 390 PARK AVE 18TH FL NEW YORK NY 10022
Third Point Partners Lp 10 percent owner 390 PARK AVENUE 18TH FL NEW YORK NY 10022
Kpcb Green Growth Fund Llc 10 percent owner 2750 SAND HILL ROAD MENLO PARK CA 94025
Third Point Offshore Master Fund, L.p. 10 percent owner 390 PARK AVENUE NEW YORK NY 10022

Enphase Energy (NAS:ENPH) Headlines

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