Here’s why Enphase Energy stock is plummeting after earnings and what next

by Girls Rock Investing

Enphase Energy stock continued its sharp sell-off, hitting a record low of $25.80 after the company reported its financial results. It has now slumped by 60% from its peak last year, with its market capitalization falling from $9.5 billion to $3.9 billion today. At its peak, the company was valued at over $43 billion.

Enphase Energy stock plummets after earnings

Enphase Energy is an American energy company that focuses on solar energy. It manufactures solar microinverters, which helps to convert electricity generated by individual solar panels into usable power. It also makes battery energy storage and electric vehicle chargers. 

Enphase Energy’s stock continued falling after the company published a weak quarterly report, which showed that its business deteriorated in the third quarter. 

Its revenue dropped from over $410 million in Q3’25 to $293 million in Q3’26, continuing a weakness that has been going on for a while. It blamed the decline to its US business, which experienced substantial weakness amid low solar power demand. Its European revenue also tumbled by 11%. In a statement, the CEO said:

“Our core U.S. residential solar market continues to face headwinds from higher interest rates and the expiration of the Section 25D federal tax credit. We are addressing these near-term challenges while positioning Enphase for a new phase of growth.”

The company’s profits also dropped in the third quarter. Its net income dropped to $23.3 million from $66 million in the same period last year. It stood at $36 million in the second quarter, a sign that the business is deteriorating.

Enphase Energy’s guidance was also short of expectations. It expects that its fourth-quarter revenue will be between $225 million and $255 million, much lower than the $300 million that analysts were expecting. 

These numbers explain why investors have taken short positions on the company, with the short interest being 22%. Analysts have also remained pessimistic about the company. In a recent statement, Deutsche Bank slapped the company with a sell rating, warning that the company had set a high expectation related to its safe harbor revenues. 

Enphase defines its safe harbor revenue as sales to customers who intend to install the purchased equipment for a period longer than one year.

Glj Research also slashed the target price from $24.4 to $21.4, while BMO Capital Markets fell from $37 to $28. JPMorgan slashed the target from $40 to $35, while Morgan Stanley slashed from $27 to $24.

Enphase Energy stock technical analysis

Enphase energy stock

ENPH stock chart | Source: TradingView

The daily chart shows that the ENPH stock price has slumped from a peak of $73 earlier this year to $25 today. It has already slumped below the important support level of $29.76, its lowest level in April this year. 

The stock has remained below the 50-day moving average and the Ichimoku cloud indicator. Also, the Relative Strength Index (RSI) has continued falling. 

Therefore, the stock has more downside to go, potentially to the support level of $20. However, a move above the resistance level of $30 will invalidate the bearish outlook.

The post Here’s why Enphase Energy stock is plummeting after earnings and what next appeared first on Invezz

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