Enphase Energy Drops After Guidance Cut, Price Targets Reduced

Enphase slumped on Wednesday after the solar-energy company lowered its earnings guidance for the second quarter.
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Enphase Energy  (ENPH) - Get Report shares slumped on Wednesday after the solar-energy company lowered its earnings guidance for the second quarter, leading several analysts to cut their price targets.

The stock recently traded at $147.66, down 14%. It has jumped 50% in the past six months amid investor enthusiasm for solar energy. It has fallen 17% in the past three months.

The reduced guidance stemmed from semiconductor shortages and supply-chain interruptions.

Northland analyst Gus Richard downgraded Enphase to market perform from outperform. 

The company “can’t reconcile the current bubble valuation and has limited near-term upside,” he said, according to Bloomberg.

Enphase stock trades at 31 times sales, compared with its five-year average of 6, according to Morningstar.

Analysts at Cowen, Piper Sandler and Roth Capital cut their share-price targets for Enphase, Seeking Alpha reports.

Credit Suisse’s Maheep Mandloi has a neutral rating and a $177 price target. The company’s sustained duration of supply uncertainty is surprising, he said, according to Bloomberg. Competition from string inverters could hurt Enphase short-term, he said.

Susquehanna analyst Biju Perincheril has a positive rating and a $200 target. The chip shortage could hurt Enphase short term, but sales may simply be deferred, he said, according to Bloomberg.

To be sure, Barclays’s Moses Sutton sees the stock decline as a buying opportunity, even though the semiconductor shortage was worse than he expected. Sutton has an overweight rating and $214 target.

TheStreet.com Founder Jim Cramer offered positive comments on Enphase in February.

Enphase earnings beat expectations in the fourth quarter of 2020.