Analysts Have Lowered Expectations For Enphase Energy, Inc. (NASDAQ:ENPH) After Its Latest Results

Shareholders will be ecstatic, with their stake up 25% over the past week following Enphase Energy, Inc.'s (NASDAQ:ENPH) latest full-year results. It was a credible result overall, with revenues of US$2.3b and statutory earnings per share of US$3.08 both in line with analyst estimates, showing that Enphase Energy is executing in line with expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Enphase Energy after the latest results.

View our latest analysis for Enphase Energy

Following the recent earnings report, the consensus from 35 analysts covering Enphase Energy is for revenues of US$1.62b in 2024. This implies a substantial 29% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to plunge 47% to US$1.70 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$1.88b and earnings per share (EPS) of US$2.46 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a pretty serious reduction to earnings per share numbers as well.

Despite the cuts to forecast earnings, there was no real change to the US$125 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Enphase Energy at US$173 per share, while the most bearish prices it at US$69.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 29% by the end of 2024. This indicates a significant reduction from annual growth of 39% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 16% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Enphase Energy is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Enphase Energy. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$125, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Enphase Energy going out to 2026, and you can see them free on our platform here..

You can also see our analysis of Enphase Energy's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.