ENPH Stock Tumbles To Six-Year Lows Over Multiple Price Cuts On Poor Results And Guidance

• Top Wall Street firms, including Barclays, Morgan Stanley, Mizuho, Goldman Sachs, and Wells Fargo, lowered their price targets on the stock after a weak Q3 earnings print. 
• Q3 revenue reached $293.3 million, up slightly from the prior quarter but well short of analyst estimates near $305 million. 
• CEO Badri Kothandaraman said in an earnings call with investors that the company’s IQ Solid-State Transformer was a major growth driver.  

Enphase Energy (ENPH) share price tumbled about 17% on Wednesday to its lowest in six years following a series of target price cuts from top Wall Street banks following a weak Q3 earnings report and a cautious fourth-quarter guidance. 

While most Wall Street firms lowered their price targets following the earnings release on Tuesday, Roth Capital and Oppenheimer also downgraded the stock along with price cuts. The company delivered a weak set of Q3 earnings and a meaningful miss on Q4 guidance, Roth analysts wrote in a research note. 

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Roth adds that despite the long residential downturn, it had maintained its ‘Buy’ rating given the company's technology leadership and high regard for its management, but with this print, it is cutting its estimates, including a meaningful step down in assumed margins despite Enphase having a multitude of growth vectors, as per TheFly. 

What Do Other Wall Street Banks Say?

Barclays analyst Christine Cho lowered the firm's price target on Enphase Energy to $26 from $44 and kept an ‘Equal Weight’ rating on the shares. 

Meanwhile, Oppenheimer downgraded the stock to ‘Perform’ from ‘Outperform’ after the company missed Q3 Street expectations, guided well below consensus, and indicated baseline demand of about $200M in quarterly revenue for its core businesses, according to TheFly. “Enphase has worked aggressively to maintain price and margin discipline, but the firm notes that ongoing price cuts on energy storage are beginning to impact gross margin,” Oppenheimer wrote in a note. 

Furthermore, JPMorgan cut its target on ENPH stock to $29 from $35, Mizuho dropped to $34 from $45, Goldman Sachs lowered its target to $40 from $47, and Wells Fargo cut to $34 from $44. 

ENPH Q3 Overview

The solar energy company posted revenue of $293.3 million, up marginally from the previous quarter but missed analyst estimates. Adjusted earnings came in at $0.41 per share, also below consensus. Global sell-through increased about 1% sequentially, while residential demand slowed. 

While the company’s Q3 results showed the core U.S. residential solar market facing headwinds from higher interest rates and expiring federal tax credits, growing AI demand is on the horizon. 

CEO Badri Kothandaraman said in an earnings call with investors that the company’s IQ Solid-State Transformer was a major growth driver. 

ENPH Stock: Retail View 

Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘extremely high’ message volumes. 

ENPH stock has lost about 24% year-to-date 

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