Enphase Energy, Inc. (ENPH): A Bull Case Theory

We came across a bullish thesis on Enphase Energy, Inc. on Elliot’s Musings’ Substack by Elliot. In this article, we will summarize the bulls’ thesis on ENPH. Enphase Energy, Inc.'s share was trading at $35.85 as of June 20^th. ENPH’s trailing and forward P/E ratios were 32.89 and 14.51, respectively, according to Yahoo Finance.

Enphase Energy (ENPH) reported Q3 revenue of $380.9 million, slightly missing estimates, but the larger issue lies in its disappointing Q4 guidance of $360–$400 million versus the Street’s expectation of $435 million. This gap has triggered concerns that current headwinds—namely, European weakness and declining battery shipments—are not transitory. Although U.S. revenue jumped 43% QoQ, it was primarily driven by inventory normalization rather than robust demand.

California remains a stronghold, with over 50% market share and rising battery attachment rates due to NEM 3.0, but intensifying competition, particularly from Tesla’s newly launched Powerwall 3, is a looming threat. Tesla’s integrated inverter-and-battery solution directly challenges Enphase’s core microinverter offering by simplifying installation and reducing costs, making it ideal for the growing TPO solar market—a segment where Enphase is underweight.

Europe remains a pain point, with a 15% QoQ revenue decline amid deteriorating economic conditions and reduced solar appeal due to lower power prices. Enphase’s Q3 battery shipments were strong at 173 MWh, but guidance for a 13% decline in Q4 suggests competitive pressures are rising. The company is pinning future hopes on the 2025 launch of its IQ9 microinverter using gallium nitride to improve efficiency and cost.

However, execution risk is high, and timelines uncertain. EBITDA estimates have dropped from $1.1B to under $900M for 2026, and at ~14x EBITDA, the stock isn’t cheap for a sector facing commoditization. While a small position was taken at $80, growing competitive risks and declining estimates warrant caution until strategic clarity emerges.

Previously, we covered a bullish thesis on Enphase Energy, Inc. by OppCost in May 2025, which highlighted the company’s shift to an integrated energy solutions provider and long-term growth potential. The company’s stock price has depreciated by approximately 28% since our coverage. This is because the recovery lagged behind expectations. Elliot shares a similar view but emphasizes rising competition and execution risks.

Enphase Energy, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 40 hedge fund portfolios held ENPH at the end of the first quarter, which was 39 in the previous quarter. While we acknowledge the risk and potential of ENPH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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