Enphase Energy, Inc. Just Missed EPS By 21%: Here's What Analysts Think Will Happen Next

It's been a mediocre week for Enphase Energy, Inc. (NASDAQ:ENPH) shareholders, with the stock dropping 14% to US$45.07 in the week since its latest first-quarter results. Statutory earnings per share fell badly short of expectations, coming in at US$0.22, some 21% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$356m. 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.

Our free stock report includes 2 warning signs investors should be aware of before investing in Enphase Energy. Read for free now.

Taking into account the latest results, Enphase Energy's 36 analysts currently expect revenues in 2025 to be US$1.45b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dive 29% to US$0.80 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.55b and earnings per share (EPS) of US$1.70 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

See our latest analysis for Enphase Energy

The consensus price target fell 20% to US$61.27, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Enphase Energy, with the most bullish analyst valuing it at US$125 and the most bearish at US$33.00 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Enphase Energy's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Enphase Energy's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 2.4% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 16% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Enphase Energy.

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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Enphase Energy's future valuation.

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. We have estimates - from multiple Enphase Energy analysts - going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Enphase Energy , and understanding these should be part of your investment process.

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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.