Enphase Energy (ENPH) AI Stock Analysis

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Enphase Energy

(NASDAQ:ENPH)

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Outperform 74 (OpenAI - 4o)

Rating:74Outperform

Price Target:

$42.00

▲(14.13% Upside)

Enphase Energy's overall stock score reflects its strong financial performance and strategic initiatives, tempered by technical indicators suggesting neutral momentum and valuation metrics indicating moderate pricing. The earnings call provided positive insights but also highlighted potential challenges, such as tariff impacts and market contraction risks.

Positive Factors

Product Innovation

Continuous product innovation, such as enhanced battery systems, strengthens Enphase's competitive edge and supports long-term growth by meeting evolving customer needs.

Global Expansion

Expanding market presence in Europe, Australia, India, and Japan diversifies revenue streams and reduces dependency on any single market, enhancing long-term stability.

Strategic Partnerships

Partnerships like the one with Essent enable Enphase to enhance product offerings and customer value, driving adoption and increasing market penetration over time.

Negative Factors

Tariff Impacts

Tariff impacts can erode profit margins, increasing costs and potentially affecting pricing strategies, which could hinder long-term profitability.

Market Contraction Risk

A projected market contraction due to tax credit expiration poses a risk to future revenue growth, necessitating strategic adjustments to mitigate impact.

Inventory Management

Elevated inventory levels can lead to increased holding costs and potential write-downs, impacting cash flow and operational efficiency if not managed effectively.

Enphase Energy (ENPH) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.84B

Dividend YieldN/A

Average Volume (3M)7.88M

Price to Earnings (P/E)29.7

Beta (1Y)1.03

Revenue Growth4.39%

EPS Growth37.70%

CountryUS

Employees2,781

SectorTechnology

Sector Strength88

IndustrySolar

Share Statistics

EPS (TTM)0.69

Shares Outstanding130,750,780

10 Day Avg. Volume10,526,324

30 Day Avg. Volume7,875,601

Financial Highlights & Ratios

PEG Ratio-1.18

Price to Book (P/B)11.14

Price to Sales (P/S)6.98

P/FCF Ratio19.34

Enterprise Value/Market Cap1.05

Enterprise Value/Revenue3.42

Enterprise Value/Gross Profit7.12

Enterprise Value/Ebitda17.02

Forecast

1Y Price Target

$40.03

Price Target Upside8.78% Upside

Rating ConsensusHold

Number of Analyst Covering22

Enphase Energy Business Overview & Revenue Model

Company DescriptionEnphase Energy, Inc., together with its subsidiaries, designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. The company offers semiconductor-based microinverter, which converts energy at the individual solar module level, and combines with its proprietary networking and software technologies to provide energy monitoring and control services. It also offers AC battery storage systems; Envoy communications gateway; and Enlighten cloud-based monitoring service, as well as other accessories. The company sells its solutions to solar distributors; and directly to large installers, original equipment manufacturers, strategic partners, and homeowners, as well as through its legacy product upgrade program or online store. Enphase Energy, Inc. was incorporated in 2006 and is headquartered in Fremont, California.

How the Company Makes MoneyEnphase Energy generates revenue primarily through the sale of its microinverters and energy storage systems. The company offers a range of products that cater to residential and commercial markets, which includes not only the hardware but also software solutions that enable monitoring and management of solar energy systems. Key revenue streams include product sales, installation services, and recurring revenue from software subscriptions that provide ongoing monitoring and analytics. Additionally, Enphase benefits from partnerships with solar distributors, installers, and energy companies, which help expand its market reach and drive sales. The growing demand for renewable energy solutions and government incentives for solar adoption further contribute to Enphase's earnings.

Enphase Energy Key Performance Indicators (KPIs)

Any

Microinverters Shipped

Microinverters Shipped
Tracks the number of microinverters delivered, reflecting the adoption of solar technology and the company's market penetration in the solar energy sector.

Chart InsightsEnphase Energy's microinverter shipments have seen a significant decline since late 2023, reflecting elevated inventory levels and regulatory challenges. Despite strong Q2 2025 financial performance and product innovations, the company faces potential market demand declines and tariff impacts. The earnings call highlighted a mixed outlook, with strategic efforts underway to address these challenges, including the launch of advanced IQ9 microinverters and fourth-generation battery systems. Investors should monitor how these initiatives and market conditions affect future shipment volumes and revenue growth.

Data provided by:

Main Street Data

Enphase Energy Earnings Call Summary

Earnings Call Date:Jul 22, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Oct 28, 2025

Earnings Call Sentiment Neutral

The call highlighted Enphase's strong financial performance and strategic initiatives in global expansion and product innovation. However, challenges such as tariff impacts and inventory management, along with anticipated market contraction, were also discussed.

Q2-2025 Updates

Positive Updates

Strong Financial Performance

Enphase reported quarterly revenue of $363.2 million, with a gross margin of 49% and operating income as a percentage of revenue at 27% on a non-GAAP basis.

Innovation and Product Development

Launched fourth-generation battery systems with a 30% increase in energy density and began development on the fifth generation, expected to deliver a 50% increase in energy density.

Global Expansion

Reported revenue growth in Europe by 11% and increased domestic battery production in Q2. The company is expanding its market presence in Australia, India, and Japan.

Customer Satisfaction

Increased global customer service NPS to 79% in Q2 from 77% in Q1, with average call wait time decreased to 1.8 minutes.

Negative Updates

Tariff Impacts

Enphase absorbed a 2% gross margin impact due to tariffs, with expectations of 3% to 5% impact in Q3 due to new tariff increases.

Elevated Microinverter Inventory

Exiting Q2, microinverter channel inventory was slightly elevated beyond the desired 8-10 weeks.

Projected Market TAM Reduction

Anticipating a 20% reduction in the U.S. total addressable market for solar installations in 2026 due to the expiration of the 25D homeowner tax credit.

Company Guidance

During the Enphase Energy's Second Quarter 2025 Financial Results Call, the company provided guidance for the third quarter of 2025, forecasting revenue between $330 million and $370 million, with anticipated shipments of 190 to 210 megawatt hours of IQ Batteries. Enphase expects a GAAP gross margin of 41% to 44%, incorporating a 3% to 5% impact from reciprocal tariffs, and a non-GAAP gross margin between 43% and 46% when considering the net IRA benefit. The company plans to ship approximately 1.2 million microinverters from the U.S., with an estimated net IRA benefit of $34 million to $38 million. Operating expenses are projected to range from $130 million to $134 million on a GAAP basis and $78 million to $82 million on a non-GAAP basis. Enphase is also prepared to address potential market challenges in 2026, such as a 20% TAM reduction due to changes in the 25D tax credit, by focusing on expanding lease financing to the long tail, reducing installation costs through product innovations, and lowering lead generation costs.

Enphase Energy Financial Statement Overview

Summary

Enphase Energy shows strong financial health with significant revenue growth and solid profitability metrics. The balance sheet is stable, though moderately leveraged, and cash flow generation is robust despite challenges in sustaining free cash flow growth.

Income Statement

Very Positive

Enphase Energy's income statement for TTM (Trailing-Twelve-Months) shows a robust gross profit margin of 47.98% and a strong net profit margin of 11.78%. The revenue growth rate from 2024 to TTM is an impressive 11.45%, showcasing a continued upward trajectory. However, the EBIT and EBITDA margins at 11.92% and 20.07% respectively, suggest room for improvement in operational efficiency.

Balance Sheet

Positive

The balance sheet is stable with a debt-to-equity ratio of 1.40, indicating moderate leverage. The return on equity (ROE) stands at 19.83%, reflecting solid profitability relative to shareholder investment. An equity ratio of 27.71% demonstrates a balanced capital structure, but there is potential to strengthen the equity base further.

Cash Flow

Positive

Cash flow metrics are strong with an operating cash flow to net income ratio of 2.36, showing efficient cash generation from operations. The free cash flow to net income ratio is 2.14, indicating robust free cash flow relative to earnings. However, free cash flow growth has declined by 22.32% compared to the prior year, suggesting some challenges in maintaining cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.48B	1.33B	2.29B	2.33B	1.38B	774.42M
Gross Profit	711.74M	629.14M	1.06B	974.60M	554.42M	345.98M
EBITDA	297.66M	210.45M	589.88M	513.88M	192.28M	204.54M
Net Income	174.70M	102.66M	438.94M	397.36M	145.45M	134.00M
Balance Sheet
Total Assets	3.18B	3.25B	3.38B	3.08B	2.08B	1.20B
Cash, Cash Equivalents and Short-Term Investments	1.53B	1.62B	1.70B	1.61B	1.02B	679.38M
Total Debt	1.23B	1.31B	1.30B	1.29B	1.04B	330.87M
Total Liabilities	2.30B	2.42B	2.40B	2.26B	1.65B	716.11M
Stockholders Equity	880.64M	833.02M	983.62M	825.57M	430.17M	483.99M
Cash Flow
Free Cash Flow	373.01M	480.09M	586.38M	698.37M	299.52M	195.78M
Operating Cash Flow	412.47M	513.69M	696.78M	744.82M	352.03M	216.33M
Investing Cash Flow	200.03M	128.27M	-366.36M	-371.91M	-1.22B	-25.57M
Financing Cash Flow	-500.53M	-460.27M	-516.77M	-17.13M	309.41M	191.68M

Enphase Energy Technical Analysis

Technical Analysis Sentiment

Negative

Last Price36.80

Price Trends

50DMA

36.00

Positive

100DMA

38.88

Negative

200DMA

49.66

Negative

Market Momentum

MACD

-0.07

Positive

RSI

48.08

Neutral

STOCH

34.14

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ENPH, the sentiment is Negative. The current price of 36.8 is below the 20-day moving average (MA) of 37.69, above the 50-day MA of 36.00, and below the 200-day MA of 49.66, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 48.08 is Neutral, neither overbought nor oversold. The STOCH value of 34.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ENPH.

Enphase Energy Risk Analysis

Enphase Energy disclosed 53 risk factors in its most recent earnings report. Enphase Energy reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Enphase Energy Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENPH	74 Outperform	$4.84B	29.73	19.79%	―	4.39%	37.70%
SHLS	67 Neutral	$1.49B	67.30	4.26%	―	-11.95%	-7.87%
ARRY	64 Neutral	$1.34B	-5.18	-57.01%	―	6.36%	-1683.09%
JKS	61 Neutral	$1.27B	-4.94	0.27%	11.16%	-30.26%	-156.69%
RUN	57 Neutral	$4.42B	-1.65	-87.71%	―	3.27%	-81.63%
SEDG	51 Neutral	$2.25B	-1.21	-334.37%	―	-36.07%	-233.14%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

* Technology Sector Average

Performance Comparison

ENPH

Enphase Energy

36.80

-69.15

-65.27%

JKS

JinkoSolar

24.74

-3.42

-12.14%

SEDG

SolarEdge Technologies

36.24

16.11

80.03%

RUN

Sunrun

19.11

2.59

15.68%

ARRY

Array Technologies

9.07

2.62

40.62%

SHLS

Shoals Technologies Group

8.50

3.37

65.69%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Oct 04, 2025