Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Geographic Areas
- Enterprise Value (EV)
- Selected Financial Data since 2012
- Operating Profit Margin since 2012
- Total Asset Turnover since 2012
- Price to Book Value (P/BV) since 2012
- Aggregate Accruals
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Profitability Ratios (Summary)
Enphase Energy Inc., profitability ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Gross profit margin
- The gross profit margin exhibited an overall upward trend from 2019 to 2023, starting at 35.44% in 2019 and reaching 46.2% in 2023. There was a notable rise in 2020 to 44.68%, followed by a slight decline to 40.12% in 2021. Subsequently, the margin steadily increased in 2022 and 2023, indicating improved efficiency in managing production costs relative to sales revenue in recent years.
- Operating profit margin
- The operating profit margin showed some volatility during the period. It increased significantly from 16.45% in 2019 to 24.07% in 2020, then sharply declined to 15.62% in 2021. After this dip, the margin recovered moderately to 19.23% in 2022 and stabilized around 19.46% in 2023. The fluctuations suggest variations in operating expenses or changes in operating income relative to sales, with recovery efforts apparent in the last two years.
- Net profit margin
- The net profit margin decreased from 25.81% in 2019 to a low of 10.52% in 2021, indicating reduced profitability at the bottom line during this period. However, the margin improved notably afterward, increasing to 17.05% in 2022 and further to 19.16% in 2023. This pattern may reflect challenges in overall cost management or one-time impacts that affected net income, followed by a rebound in profitability.
- Return on equity (ROE)
- ROE demonstrated significant fluctuations throughout the years. Starting at a very high 59.2% in 2019, it declined sharply to 27.69% in 2020, then moderately increased to 33.81% in 2021. A strong recovery occurred in 2022 with ROE rising to 48.13%, followed by a slight decrease to 44.62% in 2023. Despite volatility, the values remain relatively high, indicating effective use of shareholder equity over the period with some year-to-year variability.
- Return on assets (ROA)
- The ROA showed a downward trend from 22.59% in 2019 to its lowest point of 7% in 2021. It then improved to around 12.88% in 2022 and marginally increased to 12.97% in 2023. This suggests that asset utilization efficiency deteriorated significantly up to 2021 but experienced some recovery afterward, although it did not return to the initial high levels observed in 2019.
Return on Sales
Return on Investment
Gross Profit Margin
Enphase Energy Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Gross profit | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit demonstrated a strong upward trend over the five-year period. Starting from approximately $221 million in 2019, it increased significantly to about $1.06 billion by 2023. The most notable growth occurred between 2021 and 2022, where gross profit rose from $554 million to nearly $975 million, indicating substantial improvement in profitability at the gross level.
- Net Revenues
- Net revenues showed remarkable growth from 2019 through 2023. Revenues increased from around $624 million in 2019 to a peak of approximately $2.33 billion in 2022, followed by a slight decline to $2.29 billion in 2023. The steep increase between 2020 and 2022 highlights a period of rapid expansion, though the minor dip in 2023 suggests a plateau or stabilization of revenue generation.
- Gross Profit Margin
- The gross profit margin percentage displayed fluctuations but generally remained strong. It increased significantly from 35.44% in 2019 to 44.68% in 2020, then declined slightly to 40.12% in 2021. From 2021 onward, the margin improved again, reaching 46.2% in 2023, which represents the highest margin in the period. This indicates enhanced efficiency in managing production costs relative to sales over time, especially in the latter years.
- Summary
- The data illustrates a company experiencing substantial growth in both revenues and gross profit over the five-year span, with gross profit margins reflecting effective cost control and improving profitability. The slight revenue decrease in 2023 may warrant monitoring, but overall financial performance trends suggest strong operational efficiency and expansion during the period analyzed.
Operating Profit Margin
Enphase Energy Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Income from operations | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Operating Profit Margin, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating profit margin = 100 × Income from operations ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Revenues
- Net revenues exhibited a consistent upward trajectory from 2019 through 2022, with an increase from approximately 624 million US dollars in 2019 to over 2.33 billion US dollars in 2022. However, in 2023 there was a slight decline to approximately 2.29 billion US dollars, indicating a potential moderation in revenue growth.
- Income from Operations
- Income from operations followed a similar increasing trend, starting at around 103 million US dollars in 2019 and rising steadily to a peak of approximately 448 million US dollars in 2022. In 2023, income from operations showed a marginal decrease to approximately 446 million US dollars, closely aligning with the slight revenue dip in the same period.
- Operating Profit Margin
- The operating profit margin experienced fluctuations during the period under review. It increased significantly from 16.45% in 2019 to 24.07% in 2020, then dropped notably to 15.62% in 2021. Subsequently, the margin improved to around 19.23% in 2022 and slightly increased further to 19.46% in 2023. Despite the volatility, the margin stabilized near 19.4% in the latest years.
- Overall Analysis
- The data reflects strong revenue growth and operational income expansion from 2019 through 2022, with a plateauing trend evident in 2023. The operating margin's variability suggests changes in cost efficiency or pricing strategies, with an initial improvement followed by a decline and moderate recovery. The recent stability in margins alongside slight revenue and income decreases may indicate evolving market conditions or operational adjustments.
Net Profit Margin
Enphase Energy Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| Net Profit Margin, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net profit margin = 100 × Net income ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Revenues
- Net revenues demonstrated a strong upward trend from 2019 through 2022, increasing from approximately 624 million USD to over 2.33 billion USD. There was a slight decrease observed in 2023, with revenues declining marginally to about 2.29 billion USD. This indicates significant growth in the company's top-line performance over the period, with a noteworthy acceleration between 2020 and 2022 followed by a stabilization or minor downturn in the most recent year.
- Net Income
- Net income displayed moderate fluctuations during the first three years, initially decreasing from approximately 161 million USD in 2019 to around 134 million USD in 2020, and then increasing to about 145 million USD in 2021. However, a substantial increase is apparent in 2022, where net income nearly tripled to approximately 397 million USD, followed by a further rise to roughly 439 million USD in 2023. This suggests significant improvements in profitability and operational efficiency in the latter years.
- Net Profit Margin
- The net profit margin initially declined from 25.81% in 2019 to a low of 10.52% in 2021, signaling decreasing profitability relative to revenues during that period. Following this decline, the margin rebounded to 17.05% in 2022 and further improved to 19.16% in 2023. Despite the initial drop, the recovery in profit margins indicates enhanced cost management or pricing power contributing to better profitability ratios in recent years.
Return on Equity (ROE)
Enphase Energy Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| ROE, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| ROE, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The data indicates significant fluctuations and overall growth in key financial metrics over the five-year period.
- Net Income
- Net income experienced a decline from 161,148 thousand USD in 2019 to 133,995 thousand USD in 2020. It then increased moderately to 145,449 thousand USD in 2021, followed by a substantial surge to 397,362 thousand USD in 2022. In 2023, net income continued to grow, reaching 438,936 thousand USD. This pattern reflects an overall upward trajectory with a strong acceleration in the last two years.
- Stockholders’ Equity
- Stockholders' equity demonstrated a consistent upward trend. Starting at 272,212 thousand USD in 2019, it nearly doubled to 483,993 thousand USD in 2020. Although there was a slight decline to 430,168 thousand USD in 2021, the equity jumped significantly to 825,573 thousand USD in 2022 and further increased to 983,624 thousand USD in 2023. This suggests steady capital growth and increased investment over the period.
- Return on Equity (ROE)
- ROE showed considerable variability while maintaining high levels. Beginning at 59.2% in 2019, it decreased sharply to 27.69% in 2020, before recovering to 33.81% in 2021. The ratio increased markedly to 48.13% in 2022 but slightly declined to 44.62% in 2023. Despite fluctuations, the ROE indicates strong profitability relative to shareholder equity throughout the timeframe.
Overall, the data reveals a company with significant growth in profitability and equity, alongside consistently robust returns on equity, especially notable in the years 2022 and 2023. The temporary dip in 2020 suggests a period of challenge or strategic investment, which was overcome in subsequent years leading to considerable financial improvement.
Return on Assets (ROA)
Enphase Energy Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Advanced Micro Devices Inc. | ||||||
| Analog Devices Inc. | ||||||
| Applied Materials Inc. | ||||||
| Broadcom Inc. | ||||||
| Intel Corp. | ||||||
| KLA Corp. | ||||||
| Lam Research Corp. | ||||||
| Micron Technology Inc. | ||||||
| NVIDIA Corp. | ||||||
| Qualcomm Inc. | ||||||
| Texas Instruments Inc. | ||||||
| ROA, Sector | ||||||
| Semiconductors & Semiconductor Equipment | ||||||
| ROA, Industry | ||||||
| Information Technology | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals several significant trends over the five-year period. Net income demonstrates overall growth with some fluctuations. Starting at 161,148 thousand USD in 2019, net income dips to 133,995 thousand USD in 2020 but then increases steadily to 145,449 thousand USD in 2021, followed by a substantial rise to 397,362 thousand USD in 2022 and further to 438,936 thousand USD in 2023. This pattern suggests initial challenges or investments that impacted profitability in 2020, after which the company achieved strong earnings growth.
Total assets exhibit a consistent and marked upward trend throughout the period, expanding from 713,223 thousand USD in 2019 to 3,383,012 thousand USD in 2023. The asset base nearly doubled between 2019 and 2020 and continued to grow significantly in subsequent years, indicating substantial asset accumulation, which may reflect expansion, acquisitions, capital investments, or improved operational capacity.
The return on assets (ROA), expressed as a percentage, shows a decline from 22.59% in 2019 to 7.00% in 2021, despite rising net income in the latter year. This decline suggests that the rate at which net income is generated from assets weakened initially, possibly due to rapid asset growth outpacing profitability increases. However, ROA recovers to 12.88% in 2022 and slightly improves further to 12.97% in 2023, implying improved efficiency or profitability relative to the asset base in the more recent years.
- Net Income
- Initial dip in 2020 followed by sustained and strong growth through 2023.
- Total Assets
- Continuous and rapid increase each year, nearly quintupling over the five-year span.
- Return on Assets (ROA)
- Decreased sharply from 2019 to 2021, then recovered partially in 2022 and 2023, reflecting fluctuations in asset utilization efficiency.
In summary, the period is characterized by aggressive asset growth accompanying rising net income and a rebound in profitability efficiency, indicating a phase of scaling operations with subsequent improvements in financial performance metrics.