Enphase Energy: Revenue Bottom in Sight but Structural Headwinds Anchor Hold Call

BMO Capital analyst Ameet Thakkar upgraded the rating on Enphase Energy to a Hold today, setting a price target of $41.00.

Ameet Thakkar has given his Hold rating due to a combination of factors around Enphase Energy’s near‑term trough and its medium‑term recovery prospects. He notes that management’s first quarter 2026 revenue outlook, excluding safe‐harbor volumes, came in above his prior forecast and roughly in line with the company’s earlier informal indications, suggesting the post–tax credit downturn may be less severe than feared. More importantly, management indicated with greater conviction than expected that second quarter 2026 revenue should improve sequentially, reinforcing his view that the first quarter will likely represent the bottom in top‐line performance following the expiration of Section 25D residential solar loan tax credits.
At the same time, Thakkar highlights that Enphase has already ceded market share in the United States due to changing industry conditions, including the shift toward third‑party ownership models and the impact of California’s NEM 3.0 regime. He believes the loss of the 25D credit will weigh more heavily on Enphase than on some peers and will compress overall U.S. residential solar demand in 2026, limiting upside despite the anticipated sequential recovery from the trough. Given this combination of an improving revenue trajectory but structurally tougher market conditions and a diminished share position, he no longer expects the stock to lag as sharply as during the downturn but also does not see a clear catalyst for outperformance. As a result, he raises his target price yet maintains a neutral stance, reflected in his Hold (Market Perform) rating.

In another report released yesterday, TD Cowen also maintained a Hold rating on the stock with a $40.00 price target.