It has been about a month since the last earnings report for Enphase Energy (ENPH Quick QuoteENPH - Free Report) . Shares have lost about 4.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Enphase Energy due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Enphase Energy Q2 Earnings Beat, Revenues Up Y/Y

Enphase Energy reported second-quarter 2021 adjusted earnings of 53 cents per share, which surpassed the Zacks Consensus Estimate of 42 cents by 26.2%. The bottom line surged 211.8% from 17 cents reported in the prior-year quarter.

Including one-time adjustments, the company posted GAAP earnings of 28 cents per share against the loss of 38 cents in the year-ago quarter.

Revenues

Enphase Energy’s second-quarter revenues of $316.1 million beat the Zacks Consensus Estimate of $314 million by 0.7%. The top line surged 151.7% from the year-ago quarter’s $125.5 million, led by strong demand for its microinverter systems across all regions.

Operational Highlights

Enphase Energy’s total shipments during the reported quarter amounted to approximately 796 megawatts DC or 2,362,401 microinverters, and 43 megawatt hours of Enphase Storage systems.

Gross profit totaled $127.8 million, soaring 164% from $48.4 million a year ago.

Total operating expenses escalated 82.3% year over year to $68.4 million. This can be attributed to higher research and development, sales and marketing, and general and administrative expenses.

Operating income during the quarter totaled $59.4 million compared with $10.9 million in the year-ago quarter.

Financial Performance

Enphase Energy had $1,312.3 million of cash and cash equivalents as of Jun 30, 2021, up from $679.4 million at the end of 2020.

Cash flow from operating activities amounted to $65.7 million at the end of second-quarter 2021 compared with $25.4 million in the year-ago period.

Q3 Guidance

For third-quarter 2021, Enphase Energy expects revenues of $335-$355 million. The Zacks Consensus Estimate for the same is pegged at $341 million, lower than the midpoint of the company’s guided range.

Adjusted operating expenses are expected between $57 million and $60 million, excluding approximately $48 million estimated for stock-based compensation expenses, and acquisition-related costs and amortization.

Adjusted gross margin is likely to be 38-41%, excluding stock-based compensation expenses.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month. The consensus estimate has shifted -45.01% due to these changes.

VGM Scores

Currently, Enphase Energy has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Enphase Energy has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.