/Enphase%20Energy%20Inc%20-%20solar%20panels-by%20anatoliy_gleb%20via%20Shutterstock.jpg)
Fremont, California-based Enphase Energy, Inc. (ENPH) designs, develops, manufactures, and sells solar energy equipment for the solar photovoltaic industry internationally. Valued at $4.8 billion by market cap, the company offers home and commercial solar and storage solutions.
Companies worth $2 billion or more are generally described as “mid-cap stocks,” and ENPH perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the solar industry. Enphase's technological prowess drives its market leadership, with industry-leading microinverter technology and integrated solar-plus-storage solutions.
Despite its notable strength, ENPH shares slipped 72% from their 52-week high of $130.08, achieved on Aug. 26, 2024. Over the past three months, ENPH stock has declined 40.7%, considerably underperforming the S&P 500 Index’s ($SPX) 5.4% rise during the same time frame.
In the longer term, shares of ENPH dipped 47% on a YTD basis and declined 69.4% over the past 52 weeks, significantly underperforming SPX’s YTD gains of 1.7% and 9% returns over the last year.
To confirm the bearish trend, ENPH has been trading below its 50-day and 200-day moving averages since early October, with slight fluctuations.
ENPH has underperformed due to Senate cuts to wind and solar incentives, considerably hurting Enphase's business. Solar stocks have struggled due to competition and regulatory issues. The future of solar subsidies is uncertain, leading to volatility in Enphase's stock, and it may take years for the company to thrive without incentives.
On Apr. 22, ENPH reported its Q1 results, and its shares closed down more than 15% in the following trading session. Its adjusted EPS of $0.68 missed Wall Street expectations of $0.71. The company’s revenue was $356.1 million, missing Wall Street forecasts of $362.1 million. For Q2, ENPH expects revenue in the range of $340 million to $380 million.
In the competitive arena of solar, SolarEdge Technologies, Inc. (SEDG) has taken the lead over the stock, with a 24.9% gain on a YTD basis and 54.2% losses over the past 52 weeks.
Wall Street analysts are cautious on ENPH’s prospects. The stock has a consensus “Hold” rating from the 32 analysts covering it, and the mean price target of $58.37 suggests a potential upside of 60.4% from current price levels.
