By Angela Palumbo
Enphase Energy stock was dropping Wednesday following disappointing financial results and revenue guidance as demand remains soft. However, much of Wall Street remains optimistic.
Enphase reported late Tuesday first-quarter adjusted earnings of 35 cents a share on revenue of $263.3 million. Analysts surveyed by FactSet were expecting adjusted earnings of 41 cents a share on revenue of $276.3 million. Revenue dropped from the previous quarter's $302.6 million.
"The decline in revenue for the first quarter of 2024 compared to the fourth quarter of 2023 was the result of seasonality and a further softening in U.S. demand, while we continued to reduce shipments to manage channel inventory," the company said in the earnings release.
The maker of micro inverter systems for solar panels also said it expects second-quarter revenue to be between $290 million and $330 million, which is below Wall Street estimates of $354 million.
Shares of Enphase were down 8.9% in premarket trading Wednesday to $103.40. Coming into the session, the stock has dropped 14% this year and 31% over the last 12 months as solar companies across the board struggle with demand as high interest rates increase the cost to finance expensive projects, like installing solar panels.
Canaccord Genuity Capital Markets analyst Austin Moeller lowered his price target on Enphase to $130 from $132 while maintaining his Buy rating. He wrote in a research note Wednesday that he was "unsurprised by the Q2 guide given the reduced forecast for 2024 interest rate cuts." The Federal Reserve is expected to keep interest rates higher for longer in its efforts to bring down inflation.
Mizuho Securities analyst Maheep Mandloi lowered his price target to $147 from $148 while maintaining a Buy rating "due to ENPH's position as market leader with strong pricing power, resilient margins, and growth opportunity tied to solar+storage penetration."
Write to Angela Palumbo at angela.palumbo@dowjones.com
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(END) Dow Jones Newswires
April 24, 2024 08:14 ET (12:14 GMT)
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