Enphase Stock Surged 554% in 2020 -- Is It a Buy for 2021?

Solar power, though around for decades, has seen a renewed interest recently. A push for cleaner energy sources, combined with improving economics for solar thanks to cost reductions, is mainly behind the growing enthusiasm. Several solar stocks soared to new highs in 2020, reflecting investors' positive sentiment for the sector. One such company is Enphase Energy (NASDAQ: ENPH), whose strong performance during the year sent its stock surging a massive 554% in 2020 as of this writing. But do the company's fundamentals support the stock's steep rise? Let's find out.

Enphase Energy has come a long way since 2016 when the company faced a cash crunch and struggled to generate profits. Over the years, Enphase has surely turned itself around by reducing costs while growing revenues. In the latest quarter, the company generated $39.4 million in net income. Its revenue growth in the last couple of years has exceeded that of its close rival SolarEdge Technologies (NASDAQ: SEDG).