Why Is Enphase Energy Stock Getting Obliterated?

Enphase Energy, Inc. ENPH shares are trading lower by 12.8% to $83.87 Friday morning after the company issued weak fourth-quarter guidance.

The company also received a number of analyst rating updates following the earnings print.

What Happened?

Enphase reported third-quarter earnings with earnings per share of $1.02, missing the estimated $1.03, and revenue of $551.1 million, falling short of the $566.02 million estimate.

The company attributed disappointing results to high inventory levels at distribution partners and reduced demand in key European markets, including the Netherlands, France and Germany.

Enphase meanwhile expects fourth-quarter revenue to range from $300 million to $350 million, below the estimated $601.24 million.

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What Else?

Higher yields on relatively safer investments like Treasury bonds have also likely attract investors away from riskier growth stocks like Enphase in 2023. This can lead to a decrease in demand for stocks and result in lower stock prices.

Higher interest rates can lead to higher discount rates used in evaluating the present value of future cash flows. This can result in a lower valuation for growth stocks like Enphase that rely on strong future cash flow expectations.

According to data from Benzinga Pro, ENPH has a 52-week high of $339.92 and a 52-week low of $80.27.