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With a market cap of $11.8 billion, Enphase Energy, Inc. (ENPH) operates in the renewable energy technology sector and specializes in smart home energy solutions for solar and storage. The Fremont, California-based company develops and sells microinverters, storage systems, and software that enable efficient energy management for residential solar power systems.
Shares of the home energy technology company have underperformed the broader market over the past 52 weeks. ENPH has risen 8.2% over this time frame, while the broader S&P 500 Index ($SPX) has gained 31.1%. In 2024, ENPH stock declined 33.8%, compared to SPX's 19.8% YTD gain.
Narrowing the focus, ENPH stock has also lagged behind the Technology Select Sector SPDR Fund's (XLK) 30.3% rise over the past 52 weeks and a 16.2% increase on a YTD basis.
Enphase Energy has underperformed due to a sharp decline in European shipments, with low power demand keeping prices at zero or negative levels, discouraging new projects and hurting equipment sales. Additionally, U.S. project execution has slowed due to public opposition and litigation, requiring government intervention to address bottlenecks.
Moreover, the stock tumbled 14.9% following its Q3 earnings release on Oct. 22 due to a substantial 30.9% year-over-year revenue decline, with sales falling short of analyst expectations. The company's Q4 guidance of $380 million was 12.7% below projections, indicating ongoing demand challenges and lack of immediate recovery. Also, Enphase’s adjusted EPS of $0.65 missed estimates, raising concerns about profitability amid rising costs and weaker-than-expected sales volumes.
For the current fiscal year, ending in December, analysts expect ENPH's EPS to decline 72.1% year-over-year to $0.92 per share. The company's earnings surprise history is mixed. It beat the consensus estimates in one of the last four quarters while missing on three other occasions.
Among the 36 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 15 “Strong Buy” ratings, one “Moderate Buy,” 17 “Holds,” one “Moderate Sell,” and two “Strong Sells.”
This configuration is less bullish than three months ago, with 17 “Strong Buy” ratings on the stock.
On Oct. 28, Seaport Research lowered Enphase Energy's price target to $129, citing European regulatory challenges and slower product expansion, but maintains a Buy rating due to expected U.S. residential recovery, strong battery strategy, and robust cash flow.
The mean price target of $106.49 represents a premium of 21.8% to ENPH's current levels. The Street-high price target of $154, implies a potential upside of 76.1% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
