Enphase Energy (ENPH) AI Stock Analysis

• Market Cap: $5.76B
• Dividend Yield: N/A
• Average Volume (3M): 4.68M
• Price to Earnings (P/E): 40.8
• Beta (1Y): 0.98
• Revenue Growth: -22.15%
• EPS Growth: -45.22%
• Country: US
• Employees: 2,781
• Sector: Technology
• Sector Strength: 67
• Industry: Solar
• EPS (TTM): 0.68
• Shares Outstanding: 131,207,020
• 10 Day Avg. Volume: 7,043,642
• 30 Day Avg. Volume: 4,683,645
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 12.96
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $54.43
• Price Target Upside: 7.19% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 24

Enphase Energy's overall score reflects strong financial performance and a positive outlook from recent earnings calls, offset by current technical weaknesses and valuation concerns. The company's solid profitability and strategic innovations are significant strengths, but moderate leverage and market challenges such as tariffs and declining US revenue pose risks. The technical analysis indicates bearish momentum, and the high P/E ratio suggests the stock may be overvalued.

Positive Factors

Market Expansion

ENPH anticipates continued improvement tied to the launch of the fourth gen battery, IQ9 in Q4, and new markets like balcony solar and Japan.

Product Innovation

ENPH is expected to introduce the IQ9 microinverter with GaN bidirectional switches, resulting in 10% more power transfer and a 10% lower cost per watt.

Revenue Performance

Europe benefitted from the release of the IQ Battery 5P FlexPhase in Germany despite a still-challenging demand environment in the region, pushing revenues ~7% higher.

Negative Factors

Competitive Pressure

The company is facing increased competition and a shift to lower-margin products, which is expected to lower its gross margins.

Market Demand

Demand remains weak in both the U.S. and Europe, with higher interest rates, installer financial difficulties, and lack of policy clarity weighing on installations.

Profitability Challenges

Enphase's gross margin is expected to face significant headwinds from tariffs, impacting profitability.

Enphase Energy Business Overview & Revenue Model

Company Description

Enphase 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 Money

Enphase Energy generates revenue through the sale of its microinverter systems, which are integrated into solar panels to optimize energy conversion. The company's revenue model is primarily based on the sale of these hardware components to solar installers and distributors. Additionally, Enphase offers energy monitoring and management software, which provides ongoing subscription-based revenue. The company also benefits from the growing demand for solar energy solutions, driven by environmental policies and incentives supporting renewable energy adoption. Partnerships with solar panel manufacturers and installers further expand their market reach and contribute to revenue growth.

Enphase Energy Financial Statement Overview

Summary

Enphase Energy exhibits strong profitability and efficient cash generation. Despite a slowdown in revenue growth, the company maintains robust margins and a stable balance sheet. Moderate leverage and potential market challenges are key risks to watch.

Income Statement

Enphase Energy's income statement reflects strong profitability and revenue growth. The TTM gross profit margin stands at 47.7%, indicating efficient cost management. Furthermore, the net profit margin has improved to 12.8% in TTM. However, the revenue growth from 2024 to TTM is 7%, a slowdown compared to previous years, which could suggest market saturation or increased competition. EBIT and EBITDA margins are healthy at 9.8% and 15.5%, respectively, showing robust operational efficiency.

Balance Sheet

The balance sheet shows a stable financial position with a debt-to-equity ratio of 0.78, indicating moderate leverage. The return on equity is strong at 22.5% in TTM, reflecting effective use of shareholder funds. However, the equity ratio of 26.1% suggests a reliance on liabilities, which could pose risks if market conditions change.

Cash Flow

Cash flow analysis reveals robust free cash flow, standing at $472 million in TTM, but the growth rate has slightly decreased by 1.7% from the previous period. The operating cash flow to net income ratio is 2.81, indicating strong cash generation relative to accounting profits. However, the free cash flow to net income ratio of 2.58 suggests that not all cash flows are translating into free cash, potentially due to reinvestments or capital expenditures.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.33B	2.29B	2.33B	1.38B	774.42M
	Gross Profit
629.14M	1.06B	974.60M	554.42M	345.98M
	EBIT
77.29M	445.74M	448.26M	215.83M	186.44M
	EBITDA
203.14M	589.88M	513.88M	192.28M	204.54M
	Net Income Common Stockholders
102.66M	438.94M	397.36M	145.45M	134.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.62B	1.70B	1.61B	1.02B	679.38M
	Total Assets
3.25B	3.38B	3.08B	2.08B	1.20B
	Total Debt
1.31B	1.30B	1.29B	1.04B	330.87M
	Net Debt
939.09M	1.01B	817.11M	918.33M	-348.51M
	Total Liabilities
2.42B	2.40B	2.26B	1.65B	716.11M
	Stockholders Equity
833.02M	983.62M	825.57M	430.17M	483.99M
Cash Flow		Free Cash Flow
480.09M	586.38M	698.37M	299.52M	195.78M
	Operating Cash Flow
513.69M	696.78M	744.82M	352.03M	216.33M
	Investing Cash Flow
128.27M	-366.36M	-371.91M	-1.22B	-25.57M
	Financing Cash Flow
-460.27M	-516.77M	-17.13M	309.41M	191.68M

Enphase Energy Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 50.78
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ENPH, the sentiment is Neutral. The current price of 50.78 is above the 20-day moving average (MA) of 48.36, below the 50-day MA of 54.86, and below the 200-day MA of 78.74, indicating a neutral trend. The MACD of -2.54 indicates Negative momentum. The RSI at 51.43 is Neutral, neither overbought nor oversold. The STOCH value of 62.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ENPH.

Enphase Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXT	76 Outperform	$6.25B	11.30	39.64%	―	21.46%	123.22%
FSLR	73 Outperform	$13.59B	10.78	16.77%	―	19.42%	23.19%
ENPH	66 Neutral	$5.76B	40.81	17.13%	―	-22.15%	-45.22%
Sector *	60 Neutral	$10.94B	10.37	-6.73%	2.98%	7.75%	-12.61%
ARRY	59 Neutral	$785.44M	―	-49.11%	―	-21.31%	-593.57%
RUN	56 Neutral	$1.60B	―	-69.47%	―	-2.08%	-80.64%
SEDG	54 Neutral	$848.45M	―	-121.50%	―	-57.89%	-559.87%

Enphase Energy Corporate Events

Enphase Energy Restructures for Efficiency and Innovation

Enphase Energy is implementing a restructuring plan to align its workforce with business needs, impacting 17% of its global staff. The company is focusing on operational efficiencies by consolidating manufacturing to four locations, ceasing operations in Mexico, and reducing costs through automation and AI. Despite industry challenges, Enphase remains committed to innovation with new products in the pipeline and aims to lower operating expenses for 2025, while supporting affected employees with severance packages.