Enphase Energy Downgraded: Analyst Cites Competitive Pressures And Market Share Loss In Inverter Segment

RBC Capital Markets analyst Christopher Dendrinos downgraded Enphase Energy, Inc. ENPH to Sector Perform from Outperform, lowering the price forecast to $100 from $125.

According to the analyst, competitive market dynamics may impact the company’s prospects, leading to a slower growth rate next year that is not accounted for in current consensus estimates.

Dendrinos models 2025 revenue of $1.825 billion, which is 8% below consensus, and 2026 revenue of $2.05 billion, which is 13% below consensus.

The analyst estimates that 6% of Enphase Energy’s inverter installations in California are part of projects using Powerwall 2 batteries.

If Tesla, Inc. successfully transitions customers to Powerwall 3, Enphase Energy could lose this inverter market share. While this trend is primarily observed in California, it still represents an incremental headwind for Enphase.

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Battery demand has exceeded expectations year-to-date, and the analyst sees continued growth next year with ongoing NEM 3 adoption.

However, that growth from current levels may start to slow, the analyst cautioned.

The demand this year can be attributed to NEM 3 adoption and market share gains in California, where Enphase Energy has successfully captured share with its IQ Battery 5P.

Price Action: ENPH shares are trading lower by 8.79% to $92.55 at last check Tuesday.

Photo via Shutterstock

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