Enphase Energy Reports Disappointing Q3 Earnings, Shares Drop in After-Hours Trading
Enphase Energy, a leading player in the solar energy sector, experienced a significant decline in its stock price following the release of its third-quarter earnings report for Fiscal Year 2024. The company’s earnings per share (EPS) came in at $0.65, falling short of the analysts’ consensus estimate of $0.78 per share.
In addition to the earnings miss, Enphase reported a staggering 31% decrease in year-over-year sales, with total revenue recorded at $380.87 million. This figure also failed to meet analysts’ expectations, which had projected revenue to reach approximately $392.20 million. The disappointing results led to a drop in shares by 2% in after-hours trading.
Despite the overall decline in sales, Enphase did see a quarter-over-quarter revenue increase in the U.S., where revenue rose by about 43% compared to the previous quarter. This growth was attributed to higher shipments to distributors as inventory levels began to normalize. However, the situation was less favorable in Europe, where revenue fell by around 15% due to a continued decrease in demand.
During the third quarter, Enphase also engaged in share repurchases, buying back 434,947 shares of common stock at an average price of $114.48 per share, totaling approximately $49.8 million. Additionally, the company allocated around $6.3 million to withhold shares for tax obligations related to employee stock vesting, which resulted in a reduction of the diluted share count by 59,607 shares.
Looking Ahead: Q4 2024 Guidance
As Enphase prepares for the fourth quarter of 2024, management has provided guidance that suggests a challenging outlook. The company anticipates revenue to fall between $360 million and $400 million, significantly below analysts’ estimates of $435.2 million. Furthermore, Enphase expects a non-GAAP gross margin ranging from 49% to 52%, along with non-GAAP operating expenses projected between $81 million and $85 million. This guidance indicates a potential struggle for the company, further contributing to the decline in stock price following the earnings announcement.
Analyst Perspectives on Enphase Stock
Turning to Wall Street for insights, analysts have assigned a Moderate Buy consensus rating to Enphase Energy stock (ENPH). This rating is based on a compilation of 12 Buy recommendations, 12 Holds, and two Sell ratings issued over the past three months. Despite a 6% decline in the stock’s price over the past year, the average price target for ENPH stands at $116.93 per share, indicating a potential upside of 29%. However, it is important to note that these estimates are likely to be revised in light of the recent earnings report.
As investors evaluate the implications of Enphase’s latest earnings report and guidance, the focus will be on the company’s ability to navigate challenges in the solar market and restore investor confidence moving forward.
For those tracking the solar energy sector and Enphase Energy’s performance, the coming months will be crucial in determining the company’s trajectory and overall market position.
