TLDR
- Enphase Energy reported Q4 adjusted earnings of 71 cents per share on $343 million revenue, beating analyst estimates of 59 cents and $338 million
- Current quarter revenue guidance of $270-$300 million exceeded Wall Street’s $269 million forecast
- Sell-through demand jumped 21% in Q4 compared to last year, the strongest in over two years
- European revenue dropped 29% year-over-year while Trump tariffs cut margins by 5.1 percentage points
- Northland maintained Outperform rating with $62 price target, calling ENPH a “top pick” for 2026
Enphase Energy stock jumped 24% to $46.20 in premarket trading Wednesday after the solar equipment maker crushed fourth-quarter expectations. The company reported adjusted earnings of 71 cents per share on revenue of $343 million, topping analyst forecasts of 59 cents and $338 million.
The earnings beat came despite revenue falling 10% from the prior year. But investors focused on what’s ahead.
Enphase guided for current quarter revenue of $270 million to $300 million. The midpoint sits well above Wall Street’s $269 million estimate. That guidance sparked enthusiasm about demand stabilizing after a rough period for solar stocks.
The company revealed sell-through demand climbed 21% in the fourth quarter compared to last year. This marked the strongest demand in over two years. Homeowners rushed to complete solar and battery installations before Section 25D clean-energy credits expired at year-end.
TD Cowen analyst Jeff Osborne, who rates the stock Hold, raised his price target from $35 to $40. He cited the stronger revenue guidance. Osborne expects revenue to bottom out in the current quarter with potential recovery in Q2 as new products launch and interest rate clarity improves.
Headwinds Persist Despite Strong Quarter
Not everything looked rosy in the report. European revenue slumped 29% year-over-year due to softer demand across the region.
The Trump administration’s reciprocal tariffs hit Enphase hard. The company said tariffs reduced its margin by 5.1 percentage points during the quarter. That’s a real dent in profitability that could linger.
Still, analysts see reasons for optimism. Northland maintained its Outperform rating with a $62 price target on Wednesday. The firm projects the solar sector will hit bottom in Q1 2026, with Enphase gaining momentum throughout the year.
New Products Could Drive Growth
Northland expects several new products to boost Enphase’s performance. The lineup includes a new storage solution, the iQ9 GaN-enabled microinverter, a bidirectional EV charger, and the recently launched meter collar.
High electricity costs and grid reliability concerns should push consumers toward solar plus storage solutions. That positions Enphase as a “top pick for CY26,” according to Northland.
RBC Capital upgraded Enphase from Sector Perform to Outperform with a $54 price target. The firm cited recovery in demand for residential solar products. BMO Capital also upgraded the stock from Underperform to Market Perform based on improved Q1 2026 revenue guidance.
Oppenheimer raised its price target to $68 while maintaining an Outperform rating. The firm highlighted potential for Enphase’s bidirectional charging technology in data centers.
Other solar stocks caught the rally wave Wednesday. Sunrun gained 5.2% in premarket trading while Nextpower added 3.5%.
Solar stocks took a beating last year when President Trump’s tax bill cut Section 25D clean-energy subsidies. But the sector has rebounded in recent months. The rush to install systems before credits expired created a demand surge that helped Enphase’s fourth quarter.
Enphase beat consensus expectations by 13 cents per share, according to Northland’s analysis.
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