What Happened?

Shares of home energy technology company Enphase (NASDAQ:ENPH) fell 6.8% in the afternoon session after Barclays downgraded the stock from Buy to Sell, citing the potential repeal of "section 25D" which had been largely discounted. Section 25D helps homeowners claim tax credit for solar energy and storage installations and the firm thinks the removal of the tax credit might hurt ENPH's financials.

The shares closed the day at $45.59, down 4.9% from previous close.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Enphase? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Enphase’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 7 months ago when the stock dropped 17.9% on the news that the company reported weak third-quarter earnings results that fell below Wall Street's estimates for revenue and EPS. Revenue in Europe decreased approximately 15% sequentially as demand in the region continued to decline. Guidance was also weak, with the revenue outlook for the next quarter falling below the consensus estimate. Overall, this quarter could have been better.

Enphase is down 36.1% since the beginning of the year, and at $45.63 per share, it is trading 66.1% below its 52-week high of $134.52 from June 2024. Investors who bought $1,000 worth of Enphase’s shares 5 years ago would now be looking at an investment worth $793.98.

Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.

View Comments