It has been about a month since the last earnings report for Enphase Energy (ENPH). Shares have lost about 17.4% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Enphase Energy due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Enphase Energy, Inc. before we dive into how investors and analysts have reacted as of late.
Enphase Energy Q4 Earnings Beat Estimates, Revenues Decline Y/Y
Enphase Energy, Inc. reported fourth-quarter 2025 adjusted earnings of 71 cents per share, which decreased 24.5% from 94 cents reported in the prior-year quarter. However, the bottom line topped the Zacks Consensus Estimate of 54 cents by 31.5%.
Including one-time adjustments, the company posted GAAP earnings of 29 cents per share compared with the GAAP earnings of 45 cents in the year-ago quarter.
The year-over-year earnings decline can be attributed to lower revenues as well as lower income from operations from the year-ago quarter.
ENPH reported 2025 adjusted earnings of $2.96 per share, which were significantly higher than the year-ago figure of $2.37.
ENPH’s Revenues
Enphase Energy’s fourth-quarter revenues of $343.3 million beat the Zacks Consensus Estimate of $335 million by 2.6%. However, the top line decreased 10.3% from the prior-year quarter’s reported figure of $382.7 million.
The year-over-year plunge was mainly due to weaker sales in the United States and Europe, reflecting continued softness in European demand.
The company reported revenues of $1.47 billion in 2025, which were higher than $1.33 billion in 2024.
Enphase Energy’s Operational Update
The company’s shipments amounted to approximately 1.55 million microinverters and 150.1 megawatt-hours (MWh) of Enphase IQ Batteries.
The company’s adjusted gross margin decreased 710 basis points year over year to 46.1%.
Adjusted operating expenses dropped 5.3% year over year to $78.8 million.
The adjusted operating income totaled $79.4 million, down 34.1% from the year-ago quarter.
Financial Details of ENPH
Enphase Energy had $474.3 million in cash and cash equivalents as of Dec. 31, 2025 compared with $369.1 million as of Dec. 31, 2024.
The net cash flow from operating activities amounted to $136.5 million in 2025 compared with $513.7 million at the end of 2024.
Q1 2026 Guidance by Enphase Energy
For the first quarter of 2026, ENPH expects revenues in the range of $270-$300 million. The Zacks Consensus Estimate for first-quarter revenues is pegged at $260 million, which is lower than the company’s guided range.
Enphase Energy expects to ship IQ batteries in the range of 100-120 MWh in the first quarter.
Adjusted operating expenses are expected between $77 million and $81 million. This excludes approximately $60 million estimated for stock-based compensation expenses, acquisition-related costs and amortization, as well as restructuring and asset impairment charges.
The adjusted gross margin is expected in the range of 42-45%, excluding stock-based compensation expenses and acquisition-related amortization.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a upward trend in estimates review.
The consensus estimate has shifted 16.11% due to these changes.
VGM Scores
Currently, Enphase Energy has a poor Growth Score of F, however its Momentum Score is doing a lot better with a B. However, the stock was allocated a score of D on the value side, putting it in the bottom 40% for value investors.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Enphase Energy has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Enphase Energy, Inc. (ENPH): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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