Enphase Energy (ENPH) AI Stock Analysis

• Market Cap: $6.52B
• Dividend Yield: N/A
• Average Volume (3M): 7.96M
• Price to Earnings (P/E): 38.5
• Beta (1Y): 0.73
• Revenue Growth: 20.97%
• EPS Growth: 226.98%
• Country: US
• Employees: 2,781
• Sector: Technology
• Sector Strength: 88
• Industry: Solar
• EPS (TTM): 0.71
• Shares Outstanding: 131,098,820
• 10 Day Avg. Volume: 5,542,646
• 30 Day Avg. Volume: 7,961,255
• PEG Ratio: 0.34
• Price to Book (P/B): 3.87
• Price to Sales (P/S): 2.85
• P/FCF Ratio: 43.83
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 4.80
• Enterprise Value/Gross Profit: 10.30
• Enterprise Value/Ebitda: 24.57
• 1Y Price Target: $45.64
• Price Target Upside: -8.24% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 23
• EPS Forecast (FY): 2.17
• Revenue Forecast (FY): $1.25B

• Rating: 62 Neutral
• Price Target: $55.00 ▲(10.57% Upside)
• Action: Reiterated Date: 02/05/26
• Date: Action: Reiterated 02/05/26

The score is driven primarily by mixed financial performance (profitability and improving leverage, but materially weaker cash flow and cooled demand) and supportive technical momentum (uptrend) tempered by an overextended RSI. Valuation is a notable drag due to the high P/E without a dividend, while the earnings call adds balanced support: constructive guidance and product progress offset by tariffs, Europe softness, working-capital/cash timing risks, and the near-term convertible maturity.

Positive Factors

Strong unit economics and margins

Sustained high gross margins (~48%) and a healthy EBIT margin provide durable product-level economics that cushion revenue volatility. Strong unit profitability supports reinvestment in R&D and channel programs, enabling long-term competitiveness even if volumes fluctuate.

Improved leverage and ample liquidity

Material debt reduction and a large cash balance (> $1.5B) materially strengthen financial flexibility. Lower leverage reduces balance-sheet risk in a cyclical solar market and gives the company runway to fund strategic product programs and manage near-term maturities without forcing dilutive actions.

Product, manufacturing and software momentum

New GaN microinverters, performance-boosting PowerMatch software, EV charger rollout and a higher-density, lower-cost 5th-gen battery strengthen product moat. Combined with domestic manufacturing, these advances support long-term margin and share gains in residential/commercial solar ecosystems.

Negative Factors

Tariff headwinds and regional demand weakness

A ~5% tariff hit is a structural margin pressure that directly erodes unit economics; coupled with pronounced Europe sell-through weakness and distributor price concessions, this reduces sustainable profitability in key markets and complicates multi-region demand recovery.

Material weakening in cash generation

Significantly lower operating and free cash flow constrains the firm's ability to fund growth, absorb cyclical downturns, or step up inventory/working-capital when needed. Reduced cash conversion increases reliance on balance-sheet actions to support strategic initiatives or debt maturities.

Working-capital strain and PTC timing uncertainty

Higher inventory and taking vendor ownership to meet FEOC requirements ties up cash and raises turnover risk. Large production-tax-credit receivables with uncertain refund timing create cash-timing risk, complicating liquidity planning and potentially pressuring operations if delays persist.

Enphase Energy Business Overview & Revenue Model

Company Description

Enphase Energy, Inc., together with its subsidiaries, designs, develops, manufactures, and sells home energy solutions for the solar photovoltaic industry in the United States and internationally. The company offers semiconductor-based microinverter, which converts energy at the individual solar module level, and combines with its proprietary networking and software technologies to provide energy monitoring and control services. It also offers AC battery storage systems; Envoy communications gateway; and Enlighten cloud-based monitoring service, as well as other accessories. The company sells its solutions to solar distributors; and directly to large installers, original equipment manufacturers, strategic partners, and homeowners, as well as through its legacy product upgrade program or online store. Enphase Energy, Inc. was incorporated in 2006 and is headquartered in Fremont, California.

How the Company Makes Money

Enphase Energy generates revenue primarily through the sale of its microinverters, energy storage systems, and related software solutions. The company's primary revenue stream comes from the sale of microinverters, which are critical components of solar photovoltaic systems, enabling the conversion of solar energy into usable electrical power. In addition to microinverters, Enphase offers energy management software that enhances the efficiency and monitoring capabilities of solar systems, generating additional revenue through software licensing and service subscriptions. The company also earns income from the sale of energy storage products, which allow users to store excess energy generated during peak sunlight hours for use when the sun is not shining. Enphase has established strategic partnerships with various solar panel manufacturers and installation companies, which facilitate the adoption of its products and expand its market reach. Furthermore, the growing demand for renewable energy solutions and energy independence contributes to increased sales and revenue growth for the company.

Enphase Energy Financial Statement Overview

Summary

Still profitable with strong gross margins and improved leverage year-over-year, but revenue is down versus prior peaks and cash generation has weakened materially (lower operating cash flow and sharply lower free cash flow), which reduces flexibility in a softer demand environment.

Income Statement

ENPH remains solidly profitable in TTM (Trailing-Twelve-Months), with a strong gross margin (~48%) and healthy operating profitability (EBIT margin ~16%). However, growth has clearly cooled: revenue is down in TTM (Trailing-Twelve-Months) and far below the 2022–2023 peak, and profitability has compressed meaningfully versus 2022–2023 (when net margins were ~17–19%). Overall, the income statement shows good underlying product economics but a weaker demand/volume environment and lower earnings power than the recent cycle highs.

Balance Sheet

Leverage has improved versus 2024 as total debt dropped substantially (from ~$1.33B to ~$0.63B) while equity increased (to ~$1.09B), bringing debt-to-equity down to ~1.22 in TTM (Trailing-Twelve-Months). Total assets are stable-to-up, and return on equity is healthy in TTM (Trailing-Twelve-Months) (~22%), albeit well below the exceptional 2022–2023 levels. The main drawback is that leverage is still meaningful for a cyclical solar-exposed business, so earnings volatility can translate into balance-sheet risk if the downturn persists.

Cash Flow

Cash generation has weakened materially: operating cash flow fell to ~$137M in TTM (Trailing-Twelve-Months) from much higher levels in 2022–2024, and free cash flow declined sharply (down ~56% in TTM (Trailing-Twelve-Months)). Free cash flow still largely tracks reported earnings (free cash flow is ~85% of net income), but the reduced cash inflow versus prior years is a clear negative and limits flexibility if conditions remain soft.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.47B	1.33B	2.29B	2.33B	1.38B
Gross Profit	687.00M	629.14M	1.06B	974.60M	554.42M
EBITDA	289.98M	210.45M	596.69M	520.26M	196.93M
Net Income	172.13M	102.66M	438.94M	397.36M	145.45M
Balance Sheet
Total Assets	3.51B	3.25B	3.38B	3.08B	2.08B
Cash, Cash Equivalents and Short-Term Investments	1.51B	1.62B	1.70B	1.61B	1.02B
Total Debt	1.20B	1.33B	1.30B	1.31B	1.04B
Total Liabilities	2.42B	2.42B	2.40B	2.26B	1.65B
Stockholders Equity	1.09B	833.02M	983.62M	825.57M	430.17M
Cash Flow
Free Cash Flow	95.90M	480.09M	586.38M	698.37M	299.52M
Operating Cash Flow	136.54M	513.69M	696.78M	744.82M	352.03M
Investing Cash Flow	106.79M	128.27M	-366.36M	-371.91M	-1.22B
Financing Cash Flow	-241.62M	-460.27M	-516.77M	-17.13M	309.41M

Enphase Energy Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 49.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ENPH, the sentiment is Positive. The current price of 49.74 is above the 20-day moving average (MA) of 44.71, above the 50-day MA of 38.53, and above the 200-day MA of 37.34, indicating a bullish trend. The MACD of 2.68 indicates Positive momentum. The RSI at 63.58 is Neutral, neither overbought nor oversold. The STOCH value of 54.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ENPH.

Enphase Energy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ENPH	62 Neutral	$6.52B	38.53	17.93%	―	20.97%	226.98%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JKS	61 Neutral	$1.38B	-3.01	-17.96%	10.19%	-34.29%	-732.90%
ARRY	61 Neutral	$1.64B	-17.61	-7.75%	―	35.75%	37.97%
SEDG	60 Neutral	$2.58B	-6.26	-74.68%	―	-0.14%	66.71%
SHLS	60 Neutral	$1.14B	34.30	5.80%	―	2.68%	2.90%
RUN	49 Neutral	$4.66B	-1.80	-59.68%	―	13.79%	-527.48%

Enphase Energy Corporate Events

Enphase Energy Launches Global Restructuring to Cut Costs

On or around January 20, 2026, Enphase Energy initiated a restructuring plan to align its cost base with softer near-term demand following the expiration of the U.S. 30% Residential Clean Energy Tax Credit at the end of 2025, as well as to sharpen its focus on core products and profitability. The plan includes cutting less than 6% of its global workforce, or about 160 employees, shifting some functions to lower-cost regions, adopting distribution-led sales in smaller markets such as Brazil, the Philippines and South Africa, and tightening spending while prioritizing R&D around its core microinverter, battery and software roadmap and scaling productivity through AI and automation. Enphase expects to record about $4.6 million in restructuring and asset-impairment charges, mostly in the first quarter of 2026, and aims to reduce non-GAAP operating expenses from roughly $80 million per quarter today to $70–$75 million per quarter starting in the third quarter of 2026, with the restructuring actions largely completed in the first half of 2026; the company has also outlined severance and transition support for affected employees, underscoring a bid to preserve product quality and customer service while reinforcing margin discipline in a cooling residential solar market.

The most recent analyst rating on (ENPH) stock is a Buy with a $45.00 price target. To see the full list of analyst forecasts on Enphase Energy stock, see the ENPH Stock Forecast page.