Enphase Energy: Restructuring Through a Deep 2026 Demand Trough Supports Cautious Hold Rating

TD Cowen analyst Jeff Osborne has maintained their neutral stance on ENPH stock, giving a Hold rating on January 24.

Jeff Osborne has given his Hold rating due to a combination of factors tied to Enphase Energy’s demand outlook and cost actions. The company is implementing another round of restructuring, including a roughly 6% reduction in workforce and a targeted cut in quarterly non-GAAP operating expenses to the low-to-mid $70 million range by the third quarter of 2026, down from about $80 million today. These measures are intended to protect margins and support the firm’s long-term financial model, but Osborne expects non-GAAP operating margins to dip below 20% in the first half of 2026 before recovering in the back half of the year. In parallel, Enphase is facing an unusually deep revenue trough in the first quarter of 2026, driven by headwinds from the Section 25D tax credit dynamics and a slower-than-normal seasonal pattern.

Osborne also highlights that the pace at which prepaid solar leases are adopted will be critical for the revenue rebound starting in the second quarter of 2026, adding uncertainty to the recovery trajectory. The firm is reallocating resources toward smaller international markets and sharpening its R&D focus on core products and software, which may support long-term competitiveness but will take time to fully bear fruit. Competitive developments, such as SolarEdge’s move into advanced power conversion for data centers through its partnership with Infineon, underscore a tightening technology race in Enphase’s broader ecosystem. Reflecting the near-term demand softness and execution risk around the transition away from customer-owned systems, Osborne slightly trims his revenue forecasts for the second quarter of 2026, supporting a more cautious, neutral stance rather than a bullish rating at this time.

In another report released on January 24, TipRanks – OpenAI also reiterated a Hold rating on the stock with a $43.00 price target.