Enphase Energy (NASDAQ: ENPH) has experienced a dramatic 70% decline in stock value over the past year, currently trading at $41. This drop marks the company’s lowest valuation in over five years, largely attributed to decreased demand in the residential solar sector due to elevated interest rates. In comparison, peer companies like Sunrun and SolarEdge Technologies have seen declines of 40% and 60%, respectively.
In the last twelve months, Enphase’s revenue decreased by 22.2%, falling from $1.8 billion to $1.4 billion. Despite a recent quarterly revenue surge of 35.2% to $356 million, the company remains under pressure. Enphase’s financial stability is relatively strong, holding a Debt-to-Equity Ratio of 22.1% and a Cash-to-Assets Ratio of 47.2%, which exceeds the S&P 500 averages.
Going forward, a potential decrease in interest rates may improve residential solar financing attractiveness. However, the company’s shift of solar battery production from China to the U.S. could affect profitability short-term. A recovery in residential solar demand, alongside tariff stabilization, will be critical for the company’s performance.
