TLDR
- Enphase Energy (ENPH) fell 16% to about $24.95 on Wednesday after Q3 results missed expectations.
- Q3 EPS was $0.41 versus the $0.51 consensus, and revenue of $293.3 million fell 28.5% year over year.
- Q4 revenue guidance of $225 million to $255 million came in below Wall Street estimates.
- Morgan Stanley cut its price target to $16, while Oppenheimer downgraded the stock to Perform.
- Enphase outlined a plan for about 50% battery growth in 2027.
Enphase Energy (ENPH) stock fell about 16% on Wednesday to trade near $24.95. It hit a new 52-week low of $23.74 during the session. The stock closed at $29.76 the day before.
The drop came after the company posted third-quarter results that missed on both lines. Adjusted EPS was $0.41, compared with the $0.51 analysts expected. A year ago, the company earned $0.90 per share.
Revenue came in at $293.3 million, short of the $304.6 million consensus. That is a 28.5% decline from the same quarter last year.
Fourth-quarter guidance did not help. Enphase expects revenue of $225 million to $255 million, which points to another sequential decline. That range also sits below what Wall Street had been looking for.
What Management Said
Management said global sell-through grew only about 1% sequentially. The company had expected about 10% earlier. That gap left investors with little to hold onto.
Executives pointed to high interest rates and the end of renewable-energy tax credits. Both are weighing on U.S. residential solar demand. Europe is also soft, based on analyst notes.
Management projects 2027 revenue of around $1 billion. About $800 million would come from a flat residential market, and $200 million from growth areas.
Not everything in the report was negative. Enphase laid out a plan for roughly 50% battery growth in 2027. The company also showed its IQ Solid-State Transformer converting 13.8 kV AC to 800 VDC, a technology aimed partly at AI data-center power.
Analysts React
The analyst response was mostly a cut. Morgan Stanley lowered its target to $16 from $24 and kept an Underweight rating. Its 2027 revenue estimate fell 28% to $900 million.
Morgan Stanley also expects adjusted gross margins to drop to about 40% in 2027 from 44%. It sees a modest recovery starting in 2028. The 2028 EBITDA estimate fell to $216 million from $381 million.
Oppenheimer downgraded the stock to Perform from Outperform. Roth Capital also issued a downgrade. JPMorgan cut its target to $29 from $35 and kept a Neutral rating.
Mizuho trimmed its target to $34 from $45 and held Neutral. It cut its 2027 revenue estimate by 14%. Bernstein lowered its target to $40 with a market-perform rating.
Goldman Sachs kept a $47 buy target before the report came out. Barclays set a $26 target on Wednesday. BMO cut its target to $28 from $37 last week.
Across Wall Street, seven analysts rate the stock a Buy, thirteen a Hold and three a Sell. The consensus target is $38.57.
The stock now sits well below its 50-day moving average of $34.40. The 200-day average is $41.11. Enphase has a market cap of about $3.35 billion.
Insiders own 2.90% of the company, while institutions hold 72.12%. Director Richard Mora sold 1,500 shares at $40.36 in August. On Wednesday, Enphase traded around $24.95, with Barclays’ $26 target just above it.
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